Finance lease and Hire purchase

Discussion in 'Accounting & Tax' started by lawrence2, 17th Sep, 2010.

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  1. lawrence2

    lawrence2 Member

    Joined:
    1st Jul, 2015
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    Location:
    Sydney
    Hey everyone,


    I've got two questions regarding the finance lease and hire purchase:

    1. From my understanding, for tax purpose, if it's a finance lease, you can deduct the repayment (rent) but you cannot claim the depreciation of a asset. However, you can deduct the interest included in the repayment and claim the depreciation if it's a hire purchase. Am I correct?

    2. For accounting purpose, can you recognise the asset in your balance sheet for both financial arrangements?


    Thanks for help.
     
    lawrence2, 17th Sep, 2010
    #1
  2. Rob G

    Rob G Well-Known Member

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    16th Oct, 2015
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    Location:
    Melbourne
    Cheers,

    Rob
     
    Rob G, 21st Sep, 2010
    #2
  3. lawrence2

    lawrence2 Member

    Joined:
    1st Jul, 2015
    Posts:
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    Location:
    Sydney
    Hey Rob, Thanks for your clarification!
     
    lawrence2, 21st Sep, 2010
    #3