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Subject Topic: implicit vs incremental borrowing rates (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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rchxenson
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Posted: 06 Apr 2009 at 17:32 | IP Logged  

so about all I know on this is that if the implicit rate is known to the lessee, we should use it over their incremental borrowing rate.

Is there anything else I need to know?  And I only think I know that, I am not 100% sure on that :)

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divyagovil1
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Posted: 07 Apr 2009 at 22:24 | IP Logged  

As per Becker review ,

 Discount/Interest Rate to be used by lessee : LESSER of

i.) Rate implicit in the lease (if known)

ii.) Rate available in the market to lessee (not prime)

 

The same rule would apply to lessor also.



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rchxenson
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Posted: 08 Apr 2009 at 08:45 | IP Logged  

sweet! thanks.
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prettynpink
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Posted: 08 Apr 2009 at 22:56 | IP Logged  

rate for leases

a)incremental borrowing rate of the lessor

b)implicit rate(by lessee if known by lessor)

whichever is lower

not sure.

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