Lease Terms Research Articles

Влияние применения ФСБУ 25/2018 «Бухгалтерский учет аренды» на финансовые показатели арендатора

Th e relevance of the topic is due to the transition of non-financial organizations in the Russian Federation from 2022 to a new procedure for accounting for lease agreements in accordance with FAS 25/2018 «Accounting for leases». The paper considers changes in the accounting of lessees, different ways of accounting for lease agreements (the main accounting procedure and simplified methods: without discounting the lease liability and without recognizing the right of use asset and liability), differences with tax accounting for income tax. The influence on the financial statements of the lessee and financial ratios is revealed. Th e dynamics of expenses during the lease term, its dependence on the discount rate and methods of transition to FAS 25/2018 are analyzed.

Экономико-правовые вопросы посредничества на рынке недвижимого имущества и в других сегментах гражданского оборота

The relevance of the subject of the selected scientific article is predetermined by the absence of the concept of mediation in the Russian civil legislation and the need to define the subject of this type of activity. As a conse-quence, there is inconsistency in the use of the term “intermediation” in relation to various segments of ser-vices, including in the sphere of real estate turnover, in trade, as well as in law enforcement activities. As a re-sult, there is inconsistency in the use of the term mediation in relation to various segments of services, includ-ing in the sphere of real estate turnover, in trade, as well as in law enforcement. The article considers the pecu-liarities of formation of intermediary services in the real estate market. The one-time nature of the majority of transactions is noted. The reasons for the short duration of the contractual lease terms of both residential and commercial real estate are revealed. The authors pay great attention to the definition of mediation and its main features. The types of mediation are distinguished in economic and legal aspects, as well as in its broad and narrow understanding. The classification of the subjects of mediation activity is carried out according to various criteria. The authors’ detailed analysis of the subject of the activity of a broker under the German Civil Code, as well as an occasional intermediary in international trade, appears to be of interest.

Aircraft acquisition optimization under demand and cost fluctuations: Before and after leasing standard changes

Given the high-value characteristics of aircraft, fluctuations in air transport demand, and dynamic leasing and purchasing costs, airlines' decisions regarding aircraft acquisition are crucial to their costs and profits. Based on the International Financial Reporting Standard (IFRS) 16 Leases, which has been in effect since 2019, all leases with terms of more than 12 months are on a balance sheet of lessees. This change may impact airlines’ financial performance and aircraft leasing decisions. This paper focuses on optimizing aircraft acquisition before and after applying IFRS 16 under multiple fluctuating factors, including aircraft demand and acquisition costs, by formulating an integer programming model. The results indicate that airlines still have to acquire a few aircraft from a channel similar to operating leases, with short lease terms but high rents. Moreover, a lease type similar to a financial lease in the old standard is increasingly adopted after the enforcement of IFRS 16 in the numerical experiments. Furthermore, aircraft leases and purchases are required for fewer years under IFRS 16 than under IAS 17.

DISTINCTNESS OF STRATA LEASE SCHEME IN MALAYSIA’S STRATIFIED BUILDING DEVELOPMENT: A REVIEW

Strata title is a document of ownership for a unit parcel in a stratified building such as a condominium or apartment. The idea of introducing land lease term registration onto strata title has allowed the creation of a newer type of strata scheme called the strata lease scheme. However problem arises when there is no specific law gazetted for the strata lease scheme, which has caused some confusion among scholars with different opinions on which laws apply to this concept. This is because the features of a strata lease scheme can be easily confused with a strata scheme. Therefore, this paper, referring to Malaysian laws, will review the application of the strata lease scheme concept within these legislation statues. It is found that a strata lease scheme is created under the purview of the National Land Code [Act 828]. Although, it does not have specific laws catering for the need for a strata lease scheme; instead, it is governed by several legislations to meet the requirement of its development intention. The distinctness features of a strata lease scheme can be found through specific laws which is discussed further in the paper. To conclude, Malaysian laws are sufficient to oversee the development of a strata lease scheme. However, minor amendments to the legislation may enhance the distinctness of strata lease scheme features in Malaysia.

VLegal Certainty of Lease Rights for Foreign Citizens of Ownership Land in Indonesia

In Indonesia, regulations have been issued that guarantee certainty over land in Indonesia, one of which is Law Number 5 of 1960 concerning the Basic Agrarian Law, which was subsequently reduced using Government Regulation Number 10 of 1961 concerning Land Registration and replaced with Government Regulation Number 24 of 1997 Concerning Land Registration, Foreign Citizens who have an interest in investing in Indonesia do a lot of land lease agreements, especially in Bali, because the term of a lease in Indonesia is not specifically regulated, law smuggling often occurs where a lease agreement has a long term, even indicating a lease for lifetime. Therefore the importance of a legal certainty regarding the lease term is regulated in a statutory regulation, so that in determining the term in the lease agreement it still has a decency and fairness in its implementation.The research method in this writing uses normative juridical law research with a statutory approach , legal concept approach and case approach. In this thesis, the author discusses two legal issues related to legal certainty regarding the time limit for leasing private land in Indonesia for foreign nationals and the legal consequences arising from the ambiguity of legal norms regarding arrangements related to the time limit for leasing private land in Indonesia. The results of the research show that in terms of determining legal certainty related to the lease term for now, it can use or be based on the principle of decency in Article 1339 Kuperdata. The consequences that arise when a lease agreement has a time limit indicating a living well lease is a non-existent legal act

GLOBAL EXPERIENCE OF LEASING RESIDENTIAL REAL ESTATE AND STATE OF AFFAIRS IN UKRAINE

In 2020-2022, the Government of Ukraine and the National Bank of Ukraine did not implement the Presidential initiatives to significantly increase the volume of provision of housing for Ukrainian citizens, including the introduction of effective mortgage and leasing financial instruments.In accordance with the foundations of the long-term (2013-2032) state policy in the investment sphere in the context of the recovery of the Ukrainian economy, the successful reform of public housing programs in Ukraine at the stage of the country's reconstruction will contribute to stimulating the attraction of investments in priority sectors of the economy, creating conditions for the activation of investment activities through the concentration of resources on the priority areas of economic development with the aim of introducing the latest and energy-saving technologies, creating new jobs, and developing regions.Currently, state housing programs in Ukraine existed and exist mainly at the stage of pilot projects. Thus, according to the new state housing program eOselya in Diya, the operator of which is PJSC "Ukrainian Financial Housing Company" (PJSC "UKRFINZHYTLO"), in 2022-2023, the state issued only 929 loans to Ukrainians in the amount of 1 billion 224.9 million. UAH.Since the beginning of hostilities, the problem of providing citizens with housing has become even more urgent. Damages from the destruction of the housing stock are estimated at $53.6 billion. Over a year of war, in total, more than 150,000 residential buildings were damaged or destroyed.Thus, it is clearly premature to talk about the solution to the issue of housing for the citizens of Ukraine at the present time.In 2019, financial leasing was introduced in Ukraine for the first time. The only operator of public housing programs in Ukraine under the terms of financial leasing was the State Mortgage Institution (SMI), which in 2019-2020 purchased about 2.3 thousand apartments to provide citizens with housing under the terms of financial leasing. At present, the operation of state housing programs in Ukraine under the terms of financial leasing has been suspended.Taking into account the above, the introduction of such a financial and credit mechanism as providing housing to citizens under the terms of financial leasing will allow the state to start creating a separate direction of providing housing to citizens of Ukraine. This will make a significant contribution to the successful reform of state housing programs in Ukraine in the context of the country's reconstruction.

Valuing options to renew at future market value: the case of commercial property leases

In this study, we develop and empirically test a valuation model for a commonly encountered option in office leases: a tenant’s option to renew at future market rent (a fair market value) with lease termination as the maturity date. The model integrates decision analysis with real options analysis and market risk with private risks. “Option value” is defined as the private value of the option to either party pre-contract, while “option price” assumes a fair agreement between transacting parties and can be positive (rental premium paid) or negative (rental discount offered). Without manifest expectations, an analysis of a sample of office leases supports the model’s logic with price estimates in a practical range. The tenants’ option price/value is shown to have a negative relationship with the original/renewal lease term; conversely, the landlords’ option value is positively related to the original/renewal term. Comparative analyses show that transaction costs have a positive effect on tenants’ option value and on prices, while vacancy costs and the vacancy period are both positively related to the landlords’ option value and negatively related to price. Market rent is found to have a negative relationship with option price. Overall, this study provides a theoretical analysis and empirical tests of the value of a real option that allows option holders to renew/extend their contracts at a fair market value.

High-speed railway and shadow banking: evidence from finance leases

ABSTRACT This paper empirically investigates the effect of improved transportation infrastructure on finance leases, a representative form of China’s shadow banking sector, using a sample of Chinese listed companies. We find robust evidence that there is a significant decline in firms’ finance leases after the opening of the high-speed railway (HSR). Furthermore, HSR brings more favourable contract terms of leasing, including larger financing size, longer maturity, and lower cost. The heterogeneity analysis shows that HSR mainly reduces the costly nonbank-affiliated leases, and finance leases are reduced primarily in state-owned enterprises.

WAYS OF OPTIMIZING LAND RELATIONS OF AGRICULTURAL ENTERPRISES

Purpose. The purpose of the article is to highlight the ways of optimizing land relations of agricultural enterprises in view of the transformational processes taking place in the context of the formation of the land market. Methodology of research. Legislative and other normative legal acts, scientific works of domestic and foreign scientists on issues related to the problems of organization and optimization of land relations of agricultural enterprises became the theoretical and methodological basis of the research. The following general scientific and special methods were used to solve the tasks: abstract and logical - during the formation of theoretical generalizations, assumptions, and the formation of conclusions; analysis and synthesis - when evaluating the organization of land relations of agricultural enterprises, substantiating the conditions for the purchase of agricultural land by their participants; comparative analysis – when comparing the domestic and foreign experience of organizing land relations; analytical groupings - when justifying the differentiation of the concentration of land in the same hands depending on zonal features. Findings. The organization of land relations in economic entities with different forms of ownership and organizational and legal form of economic management is considered. The main problems of effective land use of agricultural enterprises have been identified. The expediency of mortgage lending and the functioning of the land bank are revealed. The expediency of differentiating the concentration of land in the same hands depending on the zonal features of one or another region is substantiated. On the basis of the identified features, the conditions for the purchase of agricultural land are characterized by the participants of the appointment of agricultural enterprises. The minimum and maximum threshold of lease terms is specified based on foreign experience and Ukrainian realities. It is proposed to differentiate the amount of rent depending on the size of the enterprise and the term of use of the land plot. The main aspects of state policy in the field of improving land relations are defined and outlined. Originality. A systematic approach was used to substantiate the improvement of land relations of agricultural enterprises in order to increase the efficiency of their management. Practical value. The obtained results of the research are the basis for solving practical problems regarding the determination of conditions for the purchase of agricultural land by agricultural enterprises, the establishment of rent and lease terms. Key words: land relations, land market, land lease, agricultural enterprise.

Особенности регулирования отношений аренды государственных и муниципальных сельскохозяйственных земель в Центрально-Чернозёмном экономическом районе

The article examines the results of bidding for 2021-2022 for the right to conclude a lease agreement for agricultural land plots owned by the state or municipal in the Belgorod, Voronezh, Kursk, Lipetsk and Tambov regions representing the Central Chernozem Economic Region of Russia (CER). The analysis of the information posted on the state portal in the unified information system of the Russian Federation made it possible to assess the scale of transactions in these subjects of the Russian Federation on the basis of groupings of land plots sold at auction, by area, lease term, form of ownership. The results of past and failed transactions, transactions with one participant for the right to conclude a lease agreement are considered. The comparison of the initial and final rent for the lease of land plots per 1 hectare is carried out. The values of indicators that characterize the rental market – the capitalization coefficient and the capitalization period - have been studied during the auction. The participation and activity of legal entities, peasant (farmer) farms, and individuals in auctions for the right to conclude a land lease agreement are evaluated. The role of rent in the formation of the revenue part of the budgets of the studied subjects of the Federation is shown.

Социальный состав арендаторов священных земель в Аттике второй половины IV в. до н. э. по данным эпиграфики

The article assesses social composition of holy lands tenants in Attica of the 4th century B. C. Epigraphic material is an important source for the study of various spheres of society in the Athenian polis. There remain inscriptions on stone steles containing data on leasing of sacred lands (temenos) in Attica, dating back to the second half of the 4th century B. C. Using their data, the researcher can consider a number of issues related to the history of agrarian relations in ancient Athens. However, this material has not been used by scholars for studying history of land relations in the Athenian polis. Thus, the article is to analyze social composition of temenos tenants in Attica in the second half of the 4th century B. C. on the basis of epigraphic material at our disposal, to present their motives for the transaction. The article uses as its main source texts of agreements on lease of sacred lands in Attica, published in collections of epigraphic material by I. Kirhner and H. Pleket and cited in the scientific journal Hesperia. These inscriptions detail terms of lease of land plots dedicated to gods and heroes, name tenants, and (in some cases) indicate their rights and obligations. Based on the analysis of tests of sacred lands lease agreements, the author comes to the conclusion that tenants of sacred lands in Attica in the second half of the 4th century B. C. were citizens of the polis. Their comparative analysis with inscriptions concerning private land leasing in the same period suggests that in the sphere of private land ownership there were cases when tenants were meteks, who did not have civil status. Prosopographic analysis of the temenos tenants’ names allows the author to assume that many had noble origins and were very famous people in the polis. The author also underscores the fact that, in some cases, social composition of sacred lands tenants depended on location of the land plot. In the central areas, lands of the largest sanctuaries were dominated by tenants with a high social status. Temenos on the periphery or coastal lands were mostly leased to commoners. The article also attempts to identify motives of citizens with a high social status for participating in the lease. Apparently, this was, primarily, fulfillment of a kind of liturgy before the polis, which consisted in obligation to maintain sacred land ownership, which had a special meaning. In general, it is concluded that the majority of tenants of sacred lands in Attica in the second half of the 4th century B. C. were citizens, in some cases, of high social status, which indicates a special attitude to sacred land ownership in the Athenian polis, a desire to preserve and develop this land fund in the best traditions of the civil collective.

Rent in ownership relations on Ager Colonicus in Rome (1-2 centuries AD)

In Roman agrimensura, starting from the archaic period, there was a division of land areas: culta - meant fields suitable for tillage; inculta - unsuitable for grain crops. Culta were subjected to divisio, forming the category agri divisi. Inculta retained the status of Publicus, so they were not divisi. But the importance of these lands was important when organizing Ager Colonicus, since they created an opportunity for settlers to engage in farming and cattle breeding in addition to farming. Roman surveyors identified categories of such public lands. They could be used by the owners of nearby plots. Such lands were provided to new settlers for rent for vectigal. These were the relic lands (agri relicti) and the massif that made up the colony’s reserve (extra clusa). In addition, the remnants of the surveying - subsecivi (unoccupied centuries or its fragments) were also provided to the colonists for temporary lands. A “joint pasture” (compscuus) was often created on the segments. Also, on lease terms, the new settlers used the forest and pasture (silva et pascua). On all categories of land, ownership relations were formed within the boundaries of Ager Colonicus. As a result, the colonist’s economy acquired a complex character, which contributed to the prosperity of this new settlement.

Can Higher Land Rentals Promote Soil Conservation of Large-Scale Farmers in China?

Based on theoretical analysis, this study empirically analyzes the mediating mechanism of how land rentals work on large-scale farmers to enhance soil conservation with survey data of 425 large-scale farmers in Shandong and Anhui Provinces, the main grain-producing regions of China, and further examines the moderating effect of agricultural extension services. The results show that: (1) The higher the land rentals, the greater the probability that large-scale farmers enhance soil conservation. (2) The mediating effect demonstrates that in a highly market-oriented rural land transfer market in China, the land lease term of large-scale farmers is longer with the increase of land rentals, thus motivating large-scale farmers to engage in soil conservation. (3) As shown by the moderating effect, agricultural extension services can further positively moderate the contribution of land lease term to large-scale farmers enhancing soil conservation. In order to encourage large-scale farmers to enhance soil conservation, on the one hand it is necessary to standardize the land transfer market and proactively guide large-scale farmers to extend the land lease term. On the other hand, it is indispensable to strengthen agricultural extension services and further broaden the access to soil conservation technologies for large-scale farmers.

Economics at the FTC: Estimating Harm from Deception and Analyzing Mergers

Economists in the U.S. Federal Trade Commission’s Bureau of Economics perform economic analysis in support of the Commission’s dual missions to protect consumers and competition by preventing anticompetitive, deceptive, and unfair business practices through law enforcement, advocacy, and education. This article first presents summaries of analyses that FTC economists performed to estimate the consumer harm from two different types of deception that involved misleading information about lease terms and suppression of negative product reviews. The essay next turns to economic analyses of mergers: We first consider the vertical issues that arose in a semiconductor merger; and then we provide a discussion of how complementarity between hospitals may affect the analysis of hospital mergers.

Research on Financial Lease Pricing Model

Financial leasing is a financial innovation product with leasing and financing functions. The research on the theory of financial leasing and risk pricing methods should be highly valued. Rent is set based on the total revenue of the lessor and the total cost of the lessee. The factors that affect pricing include project costs, security deposits, fees, lease terms, revenue, interest rates, etc. Using the principle of net present value to elaborate the components of financial leases and constructing a financial lease pricing model from the perspective of maximizing the profit and interests of the lessor, an empirical analysis of the model was carried out using an actual case, thus concluding that the model is effective.

How does tenancy affect farmland prices? Effects of lease status, lease term and buyer type

PurposeLease contracts at the time of sale influence buyers' expectations about future returns of farmland ownership and may thus contribute to price dispersion. This paper investigates the conjecture that existing land lease contracts influence buyers' and sellers' costs of being information deficient and thus their bargaining position, their expectation formation about future returns, and thus ultimately the farmland price.Design/methodology/approachThe authors link different levels of information, search, and bargaining costs to three buyer types and their land use intentions. Relying on a rich dataset of farmland transactions in the German Federal State of Saxony-Anhalt from 2014 to 2019, the authors use a hedonic pricing model to investigate five hypotheses applying multivariate one-sided tests.FindingsThe authors find buyer-specific effects related to lease status and lease term of a lot. Tenant buyers pay less than non-farmer buyers for leased lots, whereas non-tenant farmers pay a markup. While prices decrease for all buyer groups with an increasing lease term, this effect is the strongest for non-tenant farmer buyers. This study’s results suggest that an existing lease contract impacts buyers' costs of being information deficient, their bargaining positions and expectation formation, and ultimately the price discovery process.Originality/valueTo the authors’ knowledge, this is the first study that decomposes the effects of tenancy on farmland prices by buyer type and lease term. The study provides insights into price dispersion for identical characteristics of farmland and explains why empirical studies have found mixed or no empirical evidence that lease contracts influence the price discovery process.

The state of use of fish resources in small reservoirs of the Rivne Oblast

Poaching and unregulated amateur fishing have led to impoverishment and, in some places, complete extermination of populations of industrially valuable fish species in Rivne Oblast, so the activities of special commercial fisheries ensure the preservation of fish resources. The purpose of the study is to analyse the state of the water fund of the Rivne Oblast, the use of fish resources of these reservoirs, in particular, the results of the activities of special commercial fisheries, industrial and amateur fishing, and aquatic bioresources. According to the State Agency of land reclamation and fisheries in Rivne Oblast, over the past twenty years, there has been a tendency to reduce the volume of fish caught and introduced into natural and artificial reservoirs. Since 2010, due to low profitability, the activities of fishing organisations have been completely stopped, although previously commercial fishing of aquatic living resources took place on large water bodies, in particular in Rivers (Horyn, Ikva, Styr), lakes (Nobel, Putylivske), reservoirs (Mlynivske, Khrinnytske). Nowadays, the main method of fishing, in addition to the activities of special commercial fisheries, is unorganised amateur fishing. Specialised public organisations of amateur fishermen unite from 8 to 15 thousand amateur fishermen and sportsmen, carry out organised amateur fishing, are engaged in the introduction of fish resources into the water bodies of the region (carp, herbivorous fish, common pike, and silver crucian carp). Carp and crucian carp make up the largest share of fishermen’s catches; pike, common perch, silver carp, roach and rudd are less common. The state of fishery management in special commercial fisheries of the Rivne Oblast has not changed over the past 10 years. As of 2021, there were only 11 of them left in the region, working on lease terms; and several private enterprises where commercial fish is grown in full-system and non-system farms. The volume of young fish entering almost all farms has tripled compared to 2015, while the volume of fish caught has slightly increased. Analysis of the state of use of fish resources in small reservoirs is necessary for further rational extraction and restoration of fish resources in small reservoirs of the Rivne Oblast

Hybrid Contracts in Leasing and Ijarah Muntahiya Bit Tamlik in Indonesia Sharia Financial Institutions

This article discusses the implementation of the concept of hybrid contracts in the product of ijarah al muntahiya bit tamlik (IMBT) and leasing at Indonesia Islamic Financial Institutions. This article aimed to find out the implementation of hybrid contract concept in IMBT and leasing products at Indonesia Islamic Financial Institutions. This article was conducted using qualitative research method. The data in this study were obtained from library materials such as books, journals, articles, etc. Data analysis techniques used were data condensation, data presentation, and drawing conclusions. The analysis results showed that the development of contracts in Islamic financial institutions was inevitable due to the implementation of multi-contracts. The merging of two contracts is also known as (hybrid contract or al-'uqudal-murakkabah) such as ijarah al mutahiya bit tamlik (IMBT). IMBT is a combination of two inter-ijarah contracts (lease) and the sale and purchase or grant is made at the end of the lease term. The implementation and merging of two contracts (hybrid contracts) in IMBT may use several contracts, including ijarah contract, ba'i contract, wakalah contract, and hibah contract.

Leasing agricultural real property as one of the forms of managing the property of the Agricultural Property Stock of the State Treasury

A lease agreement with a purchase option, referred to as ‘agricultural leasing’ in legal scholars’ writings, is regulated under Article 38a of the Act on the Management of Agricultural Real Properties of the State Treasury (hereinafter referred to as ugnrSP). Although the said provision has been in force since 19 January 1994, it is not used in practice. So far, no ownership has been transferred under this procedure, which is indeed perplexing. Under the said provision, property of the Agricultural Property Stock of the State Treasury may be leased to natural or legal persons, with the tenant having the right to purchase the leased property no later than at the end of the lease term. Lease with a purchase option may prove beneficial for both the National Centre for Agricultural Support (hereinafter referred to as KOWR) and for the lessee. The agreement carries a lending functionality as it is a form of a loan granted by KOWR to the tenants. On the other hand, in this form KOWR may transfer property that requires large financial expenditure, thereby making its presence in the Stock economically unprofitable, which cannot be sold on the basis of a contract of sale. The purpose of the article is to examine whether, in view of the changes introduced in recent years as regards the sale of agricultural real properties from the Agricultural Property Stock of the State Treasury, it is possible to enter into lease agreements with a purchase option, what real properties may be sold under this agreement, who may be a party to it, as well as to establish why Article 38a is not applied in practice.

IFRS 16 Incremental Borrowing Rate: Comparability Issues and a Methodology Proposal for Loss Given Default Adjustment

Under the IFRS 16 capitalization model for lessees, entities should measure both the lease liability and the ‘right of use’ (the lease asset) by discounting future lease payments over the lease term. For the most part, entities are using the Incremental Borrowing Rate (IBR) to perform said discounting. IFRS 16 establishes that the IBR must consider the underlying leased asset as collateral, and therefore the yield to be used should reflect a Loss Given Default (LGD) which may vary according to the estimated recovery rate of the asset, be it machinery, real estate, vehicles, etc. The previous literature has shown that the use of discount rates in IFRS is inconsistent across firms, and also that it is arbitrary. Through an empirical analysis using information from European quoted entities, we find that most companies do not disclose IBR details, thus affecting financial statement comparability. None of them disclose how the IBR is adjusted in order to reflect the LGD. Furthermore, there is a lack of accounting and finance literature analyzing this aspect. Within this context, we propose a model that is able to adjust the standard IBR (obtained from unsecured bonds/loans yields) in order to reflect a recovery rate in line with IFRS principles. The proposed model uses Credit Default Swaps (CDSs) quoted information as a basis for introducing the adjustment to the standard IBR. More precisely, it analyzes the change in the CDS spread in response to changes in the recovery rate, and applies this change to the initial IBR.