rcar
Jan 11, 2009, 04:43 PM
SFAS 13 Discrepancy (Leases)
(FV is Fair Value; RV is Residual Value; PV is present value, IIR is the Implicit Interest Rate)
If we assume that the FV = the sales or purchase price as it says is typical in section 5c
1) Paragraph 5K basically says that PV of minimum lease payments + RV = FV
2) Paragraph 17C basically says that PV of minimum lease payments = sales price
we get this:
PV(MLP) @<hidden> = purchase price = PV(MLP+RV)@<hidden>
What am I missing here?
BTW- This is not homework. I was told to post my question here, nobody can seem to give me an answer...
(FV is Fair Value; RV is Residual Value; PV is present value, IIR is the Implicit Interest Rate)
If we assume that the FV = the sales or purchase price as it says is typical in section 5c
1) Paragraph 5K basically says that PV of minimum lease payments + RV = FV
2) Paragraph 17C basically says that PV of minimum lease payments = sales price
we get this:
PV(MLP) @<hidden> = purchase price = PV(MLP+RV)@<hidden>
What am I missing here?
BTW- This is not homework. I was told to post my question here, nobody can seem to give me an answer...