The table below takes into account data relating to example 1 for the classification of a temperamental credit contract in point b) (a lease) for VAT purposes: the turnover is therefore considered a rental-financing contract in the form of point b) of the definition of the temperamental credit contract of the VAT law. Accounting indicators are compared to the requirements of a temperamental credit contract of the VAT Act (including point b) of the definition of an installment credit contract (i.e. a temperamental credit contract) in the table below: accounting indicators compared to temperamental credit agreements. cannot always be accepted for all leases. As noted in the tables above, the indicators for the classification of a financing lease for accounting purposes differ significantly from the requirements of a financing lease (as defined in point (b) from the definition of the VAT Act`s term credit contract) for VAT purposes. A lease agreement is generally considered either as a financing lease or as an operational lease-sale agreement for the purposes of applying IFRS to SMEs. As far as leases are concerned, attention should be paid to the effects of VAT.) It is not permissible to assume that, since a lease has been classified as a lease for accounting purposes, it is also a financing lease (as defined in point b) of the definition of the VAT Act`s term credit contract) for VAT purposes. The purpose of this article is to compare the accounting considerations relating to the classifications of a financial lease (as in a previous article (accounting for IFRS leases for SMEs – Part 1: Bases) with the legal requirements of an installment credit contract (Par b)) of the VAT Act. : accounting for ifrs rental contracts for SMEs – Part 4 .
The goods at the end of the lease, as defined in. Annelize Oosthuizen (CA (SA)) is a senior lecturer in Taxation at the School of Accounting, Free State University. Personal property or mobile machinery or equipment (mobile or locked-in) is delivered under a lease agreement, and this is the fourth article in a series of five articles dealing with IFRS leases for SMEs, as well as their treatment of VAT and income tax. Click here for the previous article. […] and illustrated the accounting of financing leases and certain joint financing leases. The fourth article examined the classification of leases for VAT purposes and submitted them to the guidelines of the […] The above comparison leads to the conclusion that the lease is greater than the current value of the delivery; There you go.