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March, 2006 –
If you think you are making out like a bandit on that lease, it's time to re-read the contract. After all, the leasing company is making money, isn't it?
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Keeping Your Lease Accounting Within Bounds
By John Labate
From Treasury and Risk Management, May 2006
Captara Corp., a San Francisco-based provider of Web-based corporate lease management solutions, released a new set of lease classification and reporting enhancements to its core offering. The new functionality automates accounting classification and reporting of leases in accordance with FASB classification tests, for more consistent application and reporting from across an organization.
The system makes sure the right corporate data is applied consistently to the four lease classification tests under FAS 13 – involving transfer of ownership, bargain purchase options, the asset’s economic life and present value of lease payments – in determining whether a lease should be categorized as capital or operating for financial reporting purposes. “We’re making sure that each one of these leases [customers] enter into is properly classified,” says Michael Caglarcan, CEO of Captara, in reference to automated capabilities that replace former manual and mistake-prone processes of lease reporting. “The danger is that different people in an organization apply the rules differently, or don’t have the expertise, or don’t know the right corporate parameters to use or don’t apply them well.”
Click here to download in PDF format.
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