Operating Lease Pricing

Module OLP2.2
Operating Lease Pricing

(Half Day Course)

Topics

Interest and Tax

• The current tax regime
• Approaches to the evaluation of operating leases
• Understanding the use of interest compounding
• The basket-rate approach to funding
• Understanding the lessor’s tax position
• Measuring profitability

Evaluation

The different methods of evaluation and their effects on income

• · Gross or net?
• · gross, net after tax and dual rate of return

Sale
Asset pooling

• · treatment of short life and long life assets
• · pooling and de-pooling
• · the consequences of a change of

assumptions
Sale for tax written down value: a hidden lessor risk