CLFP - Chapter 1 - History & Overview Exam
questions and answers Graded A+
Code of Hammurabi - Ancient record of Babylonian leasing law dating to
1700BC
Ancient History - Agricultural leases were found on clay tablets; Leasing
was done for ship charters.
Middle Ages - Leasing was used for agricultural, industrial, military, and
ships
Statute of Wales - From the middle ages - Leasing of personal property
dating back to 1284AD. It introduced English common law.
Industrial Revolution - Leasing was used for horses, buggies, wagons and
the railroad.
Railroad Industry - Brought the first real growth of leasing to the U.S. in the
1800's.
Philadelphia Plan - The most popular railroad financing plan; a precursor of
today's conditional sales contract, EFA & money over money leases.
Early 1900's - Independent leasing companies were formed to provide
vendor financing for manufacturers of equipment. This led to the start of
"captives".
, Modern Equipment Finance - 1950's - Government efforts to stimulate the
economy; There were advancements in technology - business equipment and the
digital age.
Section 167 - 1950's - Allowed equipment owners to accelerate
depreciation and defer taxable income. The goal was to encourage capital
spending.
ITC (Investment Tax Credit) - 1960's - Used to stimulate the economy and
capital expenditures, it provided a tax credit to purchasers of equipment to offset
their tax liability to the government. Initially set at 7%, it became a give & take
option with the government.
Revenue Procedure 75-21 - 1970's (TAX LENS) - Laid out the 6 criteria the
IRS would use for advanced rulings to determine if the Lessor is the owner for tax
purposes.
FASB 13 - 1970's (ACCOUNTING LENS) - Provided the accounting definition
of a lease.
Set forth 4 criteria to classify a lease as either: Capital Lease or Operating Lease
and how to treat each on the financial statements of both the Lessor and Lessee.
ERTA (Economic Recovery Act of 1981) - Related to the tax treatment of
leases and methods of depreciation and Safe Harbor Leasing. Resulted in the
government losing tax revenues.
questions and answers Graded A+
Code of Hammurabi - Ancient record of Babylonian leasing law dating to
1700BC
Ancient History - Agricultural leases were found on clay tablets; Leasing
was done for ship charters.
Middle Ages - Leasing was used for agricultural, industrial, military, and
ships
Statute of Wales - From the middle ages - Leasing of personal property
dating back to 1284AD. It introduced English common law.
Industrial Revolution - Leasing was used for horses, buggies, wagons and
the railroad.
Railroad Industry - Brought the first real growth of leasing to the U.S. in the
1800's.
Philadelphia Plan - The most popular railroad financing plan; a precursor of
today's conditional sales contract, EFA & money over money leases.
Early 1900's - Independent leasing companies were formed to provide
vendor financing for manufacturers of equipment. This led to the start of
"captives".
, Modern Equipment Finance - 1950's - Government efforts to stimulate the
economy; There were advancements in technology - business equipment and the
digital age.
Section 167 - 1950's - Allowed equipment owners to accelerate
depreciation and defer taxable income. The goal was to encourage capital
spending.
ITC (Investment Tax Credit) - 1960's - Used to stimulate the economy and
capital expenditures, it provided a tax credit to purchasers of equipment to offset
their tax liability to the government. Initially set at 7%, it became a give & take
option with the government.
Revenue Procedure 75-21 - 1970's (TAX LENS) - Laid out the 6 criteria the
IRS would use for advanced rulings to determine if the Lessor is the owner for tax
purposes.
FASB 13 - 1970's (ACCOUNTING LENS) - Provided the accounting definition
of a lease.
Set forth 4 criteria to classify a lease as either: Capital Lease or Operating Lease
and how to treat each on the financial statements of both the Lessor and Lessee.
ERTA (Economic Recovery Act of 1981) - Related to the tax treatment of
leases and methods of depreciation and Safe Harbor Leasing. Resulted in the
government losing tax revenues.
