Indian Leasing by Vinod Kothari
Examples on Calculation of Capital Recovery and Lease equalisation
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CASE 2: RENTALS IN ADVANCE/ HIGH DEPRECIABLE ASSET |
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ASSET COST |
1000 |
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RENT |
294 |
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YEARS IN LEASE |
5 |
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ACCOUNTING IRR |
24.00% |
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FINANCIAL IRR |
24.49% |
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LMF |
1.00% |
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DEPRECIATION RATE |
100.00% |
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RESIDUAL VALUE |
0.00% |
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YEAR |
LEASE |
INV.O/S |
FIN CRG. |
CAP. REC. |
DEPRN. |
LEA |
LTA |
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RENT |
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1 |
294 |
1000 |
170 |
124 |
1000 |
-876 |
-876 |
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2 |
294 |
876 |
140 |
154 |
0 |
154 |
-722 |
|
3 |
294 |
722 |
103 |
191 |
0 |
191 |
-531 |
|
4 |
294 |
531 |
57 |
237 |
0 |
237 |
-294 |
|
5 |
294 |
294 |
0 |
294 |
0 |
294 |
0 |
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---------- |
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1000 |
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PROFIT AND LOSS A/C |
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DEBITS |
YEAR 1 |
CREDITS |
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DEPRN. |
1000 |
LEASE RENT |
294 |
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|
NET CREDIT |
170 |
LESS: LEA |
-876 |
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----------- |
----------- |
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|
1170 |
1170 |
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YEAR-WISE VIEW OF P & L ACCOUNT |
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YEAR |
CREDITS |
REDN. |
DEBITS |
NET |
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|
LEASE |
LEA |
DEPRN. |
CREDIT |
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|
RENT |
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|
1 |
294 |
-876 |
1000 |
170 |
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2 |
294 |
154 |
0 |
140 |
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3 |
294 |
191 |
0 |
103 |
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4 |
294 |
237 |
0 |
57 |
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|
5 |
294 |
294 |
0 |
0 |
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BALANCE SHEET |
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ASSETS |
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FIXED ASSET |
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COST |
1000 |
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LESS: DEPRN. |
1000 |
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LESS: LTA |
-876 |
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|
----------- |
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|
876 |
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YEAR -WISE VIEW OF BALANCE SHEET |
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|
YEAR |
FIXED |
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ASSET |
NET |
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|
COST |
DEPRN. |
LTA |
VALUE |
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|
1 |
1000 |
1000 |
-876 |
876 |
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2 |
1000 |
1000 |
-722 |
722 |
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3 |
1000 |
1000 |
-531 |
531 |
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|
4 |
1000 |
1000 |
-294 |
294 |
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|
5 |
1000 |
1000 |
0 |
0 |
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