Fleet Management Information
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Bargain Purchase Option - In the event of applying criteria for balance sheet allocation of the leased asset in accordance with US-GAAP, it is important whether the lessee is given a bargain purchase option. This refers to a purchase option the exercise price of which is significantly below the expected market value of the leased asset on the exercise date so that the exercise of the option can be regarded as sufficiently certain right from the beginning.
Balance Sheet Neutrality - When capitalizing the leased item on the assets side of the lessor’s balance sheet.
Full Service Leasing - This scenario is when a service agreement that encompasses extensive services relating to the leased asset is concluded in connection with a leasing contract.
Residual value - The actual or calculated value of the leased asset is the residual value on expiration or premature cancellation of the leasing contract. There are three known types of residual value:
- Residual Book Value: The residual book value is the value of the leased asset in the balance sheet according to the accounting provisions at the time of termination of the leasing contract.
- Calculated Residual Value: In this case, the lessee and lessor assume that the leased asset still has a certain residual value resulting from the agreed use taking into account the future market price development at the end of the agreed basic lease period.
- Market Value: The market value is the actual value of an asset that can be obtained in the given market situation at the time of sale.
Sale and Leaseback - In a sale-and-leaseback contract, the leasing company purchases the leased asset from the future lessee and then leases it back to the latter. In this way, the lessee achieves a liquidity inflow, improves the key balance sheet figures, and optimizes the balance sheet structure. As a result, it may also be possible to mobilize undisclosed reserves.