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					 COMPANY NAME
 DATE
 BUY VS. LEASE CONSIDERATION WORKSHEET

 General Information
 Is the company a GST registrant?
 Will the purchase or lease be PST exempt?
 What is the best estimate of the asset's useful life (in years)?
 What is the company's internal cost of capital (line of credit borrowing rate)?
 What is the company's effective tax rate?
 What is the CCA (tax depreciation) rate for the asset?
 Is the asset being acquired a passenger vehicle subject to Class 10.1 CCA restrictions?
 How many months will it be from the start of the lease until the company's next year end?

 Purchase information
 How much is the purchase price of the asset before sales taxes?
 How much is the GST, if any?
 How much is the PST?
 Will the cash requirements be added to your line of credit? 1
 Will you be term financing?
 Over what term (in years - max 10)?
 Term Interest rate (should not be greater than the internal cost of capital)?
 How much is the down payment (if any) all in?

 Lease information
 How much is the down payment before sales taxes?
 How much are the monthly payments before sales taxes?
 How many months is the lease for?
 What is the estimated residual value of the asset at the end of the lease period?
 Do you own the asset at the end of the lease?
 Is the final payment different than the regular monthly payments?
 How much is the final payment before taxes?
 Will virtually all of the rights of ownership transfer with this lease?
 Is there a buy-out option?
 How much is the buy-out option amount at the end of the lease before sales taxes?
                                                  2
 Is there an early buy-out option on the lease?
 After how many months?
 How much is the early buy-out payment?

 Notes:
 There should be no blank responses above unless the box has been blackened.

 1
    If the acquisition is being financed through a line of credit the result assumes that all funds
 required to acquire the asset, net of any down payment or tax recovery, will be charged interest
 at the company's internal cost of capital.

 2
   If the 'buy-out option' entered is 'no' than no early buy-out option may be entered. If a lease has
 been determined "Operating" and you wish to see the result of exercising the buy-out for
 comparison then enter the same information in the early buy-out option.




Buy vs Lease TEMPLATE provided courtesy of:   E. A. Crymble, Chartered Accountant
                                                          www.eacrymble.ca
COMPANY NAME
DATE
Buy vs. Lease Analysis and Considerations

Based on the information provided the following is the assessment:
1.   ####

                             #DIV/0!
                             #DIV/0!
                             #DIV/0!
                             #DIV/0!
2.   ####
     The NPV of the after-tax cashflows required for each option (assuming the asset is sold for its estimated residual value at the conclusion of the lease) are as follows:
          Purchasing the asset:                                                                     $                   -    #DIV/0!
          Leasing the asset :                                                                                       #DIV/0!


3.   An estimated breakdown of the key economic factors for each scenario are as follows:
            (Note: to enable a comparison the ''Purchase'' option and Leases determined to be ''Capital'' assume that the asset is sold at the end of the lease period for its residual value. Also see ''assumptions'' made below.)
     By Year                                                             1               2               3              4               5               6               7              8              9              10              11       Total
     Purchase Option:
          Charge to Income before tax                                -               -               -              -               -               -               -              -              -              -               -             -
          Income tax recovery                                        -               -               -              -               -               -               -              -              -              -               -             -
          After tax charge to income                                 -               -               -              -               -               -               -              -              -              -               -             -
            Net Cashflow requirement                                 -               -               -              -               -               -               -              -              -              -               -             -
            NBV of Asset at year end                                 -               -               -              -               -               -               -              -              -              -               -
            Debt Carrying Value at year end                          -               -               -              -               -               -               -              -              -              -               -
     Lease Option:
          Charge to Income before tax                        #DIV/0!          #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!        #DIV/0!        #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!
          Income tax recovery                                #DIV/0!          #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!        #DIV/0!        #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!
          After tax charge to income                         #DIV/0!          #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!        #DIV/0!        #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!
            Net Cashflow requirement                         #DIV/0!          #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!        #DIV/0!        #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!
            NBV of Asset at year end                         #DIV/0!          #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!        #DIV/0!        #DIV/0!        #DIV/0!         #DIV/0!
            Debt Carrying Value at year end                  #DIV/0!          #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!        #DIV/0!        #DIV/0!        #DIV/0!         #DIV/0!
     Lease including EARLY buy-out option (if Early buy-out option is exercised it can only be a Capital Lease, and it will be reflected in the results below) :
                                            #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0! #DIV/0!                 #DIV/0!          #DIV/0! #DIV/0!                               #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!
                                            #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0! #DIV/0!                 #DIV/0!          #DIV/0! #DIV/0!                               #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!
                                            #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0! #DIV/0!                 #DIV/0!          #DIV/0! #DIV/0!                               #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!
            OPTION NOT APPLICABLE                            #DIV/0!          #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!         #DIV/0!        #DIV/0!        #DIV/0!        #DIV/0!         #DIV/0!         #DIV/0!




Buy vs Lease TEMPLATE provided courtesy of:                                                      E. A. Crymble, Chartered Accountant                                                                                                      Page 2 of 3
                                                                                                                www.eacrymble.ca                                                                                                           5/17/2011
COMPANY NAME
DATE
Buy vs. Lease Analysis and Considerations

4.   Other considerations to make before proceeding.
     The overall economic result should not be the only consideration when choosing to buy vs. lease, and in some cases it could be the other factors that have a greater impact on the
     proper course. Other critical factors that should be considered include:
          l       How will the financing/lease arrangements effect other financing arrangements and any debt covenant calculations?
                   (subject to the adoption of IFRS standards, Operating leases are considered 'off balance sheet financing' because neither the debt or the asset appear
                     on the company's balance sheet. The greatest factor is often simply whether the lease is considered an Operating lease or not.)
          l       Are there similar 'used' assets readily available in the market now, and will there be a market for the asset at the end of the lease period if it has to be disposed of?
                   (If there is no need and no market for the asset at the end of the lease the calculations could be irrelevant. If you need to obtain the asset for its entire useful life
                    regardless of the method of acquisition then an operating lease with no buy-out option is not likely the best option.)
5.   Key assumption made in the calculations.

             All information provided here is strictly for general information purposes only. For the most accurate assessment consult your Public Accounting
            Professional.
             If all required information is not entered accurately the results may not be valid.
             The ultimate determination of the “best option” from an economic standpoint is based solely on the estimated NPV of all future cashflows.
             NPV of cashflow calculations are based on the annual cash position not on a monthly position.
             The comparison point between options is at the “end of the lease period” assuming that the asset could be sold at that time for the estimated residual
            value as entered.
             The example takes into account the tax recovery for the allowable deduction of purchase or lease costs. If the asset is for personal use ensure the tax
            rate entered is Nil.
             The buy-out option will be considered a “bargain purchase price” for determination of Capital vs. Operating Lease, and will be considered to be
            exercised, if it is less than 95% of the estimated residual value of the asset (as estimated and entered) at the end of the lease term.
             Annual tax recovery on leases will be based on the greater of the total lease payments (amortizing any down payment) and the net lease cost plus Capital
            Cost Allowance (CCA).
             The half year rule is assumed for asset additions in the first whole or part year.
             Interest costs on line-of-credit financing are assumed to be the cost of the net cash outlay at the company’s internal cost of capital rate.
             Interest on term debt assumed to compound semi-annually.
             This is not an exhaustive list of assumptions. Other assumptions may have been made and inadvertently may not be disclosed. These assumptions may
            have a material bearing on the results.




Buy vs Lease TEMPLATE provided courtesy of:                                     E. A. Crymble, Chartered Accountant                                                                            Page 3 of 3
                                                                                            www.eacrymble.ca                                                                                    5/17/2011

				
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