CLFP - Class Review Study Exam
Questions And Correct Answers
When should lessor register as foreign corp?
Within a state ...
Good - stock of them
Services offered
Inspection or repair of property
Office/employees
Negotiated contracts
What is dode of Hammurabi?
- 1750 BC
- Acknowledges leasing of personal property in his code of laws
- First record of leasing law
Early examples of true lease?
- Phoenicians shipping experts
- charters covered economic life of ships
,- lessee to assume benefits and obligations of ownership
What is Statue of Whales?
- 1284 AD
- leasing personal property
- 1571 defined who owned the lease property
What is Philadelphia Plan?
- 1700's railroads companies only afford tracks
- Finance from private investors for locomotives/cars
- equipment trusts
- precursor of today conditional sale contract
When & how did Independent Leasing Start?
- 1900's
- Offer short term contracts/leases
- lessor retain title
- rail cars would be returned at end
- beginning of true/operating lease
- third party leasing companies
,What is definition of captive?
- sub of mfg. primary purpose to finance parents product
What is the benefit of captive?
- Sales aid
- market control
- product differentiation
- Increase gross margin
- Ongoing customer contact
Why did lease re surge in 1950's?
- government stimulate economy after WWII
- advance in technology in business equipment
- IRS 167
How does IRS 55-540 define true lease?
P - payment exceed FMV - NOT
A - automatic titletransfer - NOT
, I - interest contained in payment - NOT
N - nominal purchase option - NOT
E - equity in lease - NOT
E - excessive lease payments - NOT
What is different between FASB 13 and IRS 55-540?
-FAB 13 - defines operating lease - ACCT
- IRS 55-540 - defines tax lease - TAX
What is FASB 13?
- 1976 Financial Accounting Standard Board
- Issued statement 13
- Set criteria by which to classify a lease capital/operating
- defined treatment on financial statements
How does FASB 13 define an operating lease?
B - bargin purchse option - NOT
E - economic useful life > 75% - NOT
A - automatic title transfer - NOT
P - PV of payments (no resid) > 90% of FMV - NOT
Questions And Correct Answers
When should lessor register as foreign corp?
Within a state ...
Good - stock of them
Services offered
Inspection or repair of property
Office/employees
Negotiated contracts
What is dode of Hammurabi?
- 1750 BC
- Acknowledges leasing of personal property in his code of laws
- First record of leasing law
Early examples of true lease?
- Phoenicians shipping experts
- charters covered economic life of ships
,- lessee to assume benefits and obligations of ownership
What is Statue of Whales?
- 1284 AD
- leasing personal property
- 1571 defined who owned the lease property
What is Philadelphia Plan?
- 1700's railroads companies only afford tracks
- Finance from private investors for locomotives/cars
- equipment trusts
- precursor of today conditional sale contract
When & how did Independent Leasing Start?
- 1900's
- Offer short term contracts/leases
- lessor retain title
- rail cars would be returned at end
- beginning of true/operating lease
- third party leasing companies
,What is definition of captive?
- sub of mfg. primary purpose to finance parents product
What is the benefit of captive?
- Sales aid
- market control
- product differentiation
- Increase gross margin
- Ongoing customer contact
Why did lease re surge in 1950's?
- government stimulate economy after WWII
- advance in technology in business equipment
- IRS 167
How does IRS 55-540 define true lease?
P - payment exceed FMV - NOT
A - automatic titletransfer - NOT
, I - interest contained in payment - NOT
N - nominal purchase option - NOT
E - equity in lease - NOT
E - excessive lease payments - NOT
What is different between FASB 13 and IRS 55-540?
-FAB 13 - defines operating lease - ACCT
- IRS 55-540 - defines tax lease - TAX
What is FASB 13?
- 1976 Financial Accounting Standard Board
- Issued statement 13
- Set criteria by which to classify a lease capital/operating
- defined treatment on financial statements
How does FASB 13 define an operating lease?
B - bargin purchse option - NOT
E - economic useful life > 75% - NOT
A - automatic title transfer - NOT
P - PV of payments (no resid) > 90% of FMV - NOT
