Net Worth - Car leases
- Thread starter tleblanc
- Start date
- Joined
- Aug 30, 2007
- Messages
- 1,821
I would list the amount owing on the lease as a debt. The car`s market value is on the asset side.
- Joined
- Aug 26, 2008
- Messages
- 730
I`m not an accountant, but that doesn`t seem like the correct way to report a leased vehicle, which you don`t own. A leased vehicle shouldn`t show up on a balance sheet or net worth statement. It makes more sense to report the monthly lease payment in your debt servicing costs or in a cash flow statement.
- Joined
- Aug 30, 2007
- Messages
- 1,821
QUOTE (JimWhitelaw @ Sep 29 2009, 10:25 AM) I`m not an accountant, but that doesn`t seem like the correct way to report a leased vehicle, which you don`t own. A leased vehicle shouldn`t show up on a balance sheet or net worth statement. It makes more sense to report the monthly lease payment in your debt servicing costs or in a cash flow statement.
Jim is correct. So to clarify, if you want a lender to consider the vehicle as an asset at market value (remember the lender will recognize the debt payments as an obligation) you need to show the buy-out cost of the vehicle at the end of the lease plus the payments still remaining as a debt against that asset. This only impacts your net worth, and most will not bother to do this as the impact is normally not significant. Your debt obligations always include the lease payment, which impacts your TDS.
Hope that is more clear,
Jim is correct. So to clarify, if you want a lender to consider the vehicle as an asset at market value (remember the lender will recognize the debt payments as an obligation) you need to show the buy-out cost of the vehicle at the end of the lease plus the payments still remaining as a debt against that asset. This only impacts your net worth, and most will not bother to do this as the impact is normally not significant. Your debt obligations always include the lease payment, which impacts your TDS.
Hope that is more clear,
- Joined
- Aug 30, 2007
- Messages
- 13,879
QUOTE (tleblanc @ Sep 29 2009, 08:38 AM) Hello everyone,
How does one calculate a car lease into their net worth? Do we even put it in there?
-Tony
No, as you don`t own it .. It is an expense
How does one calculate a car lease into their net worth? Do we even put it in there?
-Tony
No, as you don`t own it .. It is an expense
- Joined
- Aug 31, 2007
- Messages
- 947
One of the advantages of leasing buildings or equipment is that they do not show up on the balance sheet in any way.
They do get reported as an expense items.
They do get reported as an expense items.