Sacramento + Roseville Accountant for Capital Leasing Companies
Capital leasing is a complex matter that is best handled by an expert. Our CPAs are dedicated to helping you navigate complex financial matters.
Stockholders, creditors, and private investors often need assurance that the financial statements accurately represent the true financial position of a company. Your stockholders, creditors, or private investors have different levels of risk tolerance, so we provide three levels of assurance to meet your needs.
Audit – Highest Level of AssuranceAn audit provides the highest level of assurance. An audit is a methodical review and objective examination of the financial statements, including the verification of specific information as determined by the auditor or as established by general practice. Our work includes a review of internal controls, testing of selected transactions, and communication with third parties. Based on our findings, we issue a report on whether the financial statements are fairly stated and free of material misstatements. An Audit allows you to…
- Satisfy stakeholders such as employees, customers, suppliers and pressure groups, as well as the investing community, as to the credibility of published information.
- Facilitate the payment of corporate tax, goods and services tax, and other taxes on-time and accurately, thereby avoiding interest, penalties, and investigations.
- Comply with banking covenants.
- Help deter and detect material fraud and error.
- Facilitate the purchase and sale of businesses.
- Your customers, to check outstanding receivable balances,
- Your banks, to confirm cash or debt balances and terms,
- Your vendors, to verify outstanding payable balances, and
- Your attorneys, for information on pending or threatened legal action.
Review – Limited AssuranceLess extensive than an audit, but more involved than a compilation, a review engagement consists primarily of analytical procedures we apply to the financial statements, and various inquiries we make of your company’s management team. If the financial statements or supporting information appear inconsistent or otherwise questionable, we may need to perform additional procedures. A review doesn’t require us to study and evaluate your company’s internal controls or verify data with third parties or physically inspect assets. Rather, a review report expresses limited assurance in the form of the statement: “We are not aware of any material modifications” for the financial statements to be in conformity with the Generally Accepted Accounting Principles (GAAP). Reviewed financial statements must include all required footnotes and other disclosures. Why might a business request a review engagement? It can be a good middle ground, providing the advantages of a CPA’s technical expertise without the work and expense of an audit.
Compilation – Lowest Level of AssuranceIn compiling financial statements for a client, we present information that is the “representation of management” and expresses no opinion or assurance on the statements. Compilations don’t require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business. Banks often require compilations from an independent CPA as part of their lending covenants. Which Report Should You Use? Each type of financial statement report may suit specific circumstances, depending on requirements from your client’s bank or other parties, as well as meet budgetary needs. Understanding each report’s unique strengths and weaknesses can help you choose the most appropriate one. Please call if you have questions about which type of report is right for you. [/et_pb_text][et_pb_text] Capital leasing is a field of business that is often complicated. This also holds for financial matters that involve capital leases. Fortunately, you do not have to figure out how to handle your capital leasing financial matters alone. Instead, you can work with an experienced Sacramento and Roseville accountant for capital leasing companies. At the Cook CPA Group, we are committed to working with companies across California to help them with their complex financial problems. We understand that operating a capital leasing company can be stressful, and we are here to help alleviate your concerns for troublesome financial matters that may affect your company. To schedule a free consultation to discuss accounting for your capital leasing company, contact the Cook CPA Group at (916) 432-2218. You may also use our online submission form to schedule an appointment with one of our skilled accountants.
How Capital Leases Work in Sacramento + Roseville, CAA capital lease is a type of contract that is executed for the purpose of allowing a renter temporary access to a certain asset. However, capital leases are economically treated as the owning of an asset when it comes to accounting. In some cases, a renter must book assets and liabilities linked to the capital lease, depending on the terms of the contract. Understanding the accounting principles for capital leases can be difficult. However, the team of skilled accountants at the Cook CPA Group is here to help you understand how capital leases work. Typically, capital leases are utilized as long-term leases that many companies will use to acquire vital equipment needed to operate their business. One of the greatest benefits of capital leasing is that a lessee is permitted to claim depreciation for leased equipment when normally business equipment will become useless after a number of years. It is important that there are certain standards set by the Financial Accounting Standards Board (FASB) that determine whether the leasing a piece of business equipment will qualify as a capital lease. To be considered a capital lease, the lease must meet one of the following criteria:
- The lessee of the business equipment will receive the title for the equipment after the conclusion of the lease
- The capital lease has a provision that permits the lessee to buy the business equipment at below market value (possibly even for $1.00 in some contracts)
- The term of the capital lease will last for longer than 75% of the useful life of the equipment
- The lessee must submit payments that are above 90% of the fair market value of the business equipment