INTRODUCTION:
The financial lease also known as "leasing" is a contract by which the lessor agrees to grant the use or temporary enjoyment of a good to the lessee, whether natural or legal person, the latter being obliged to pay a periodic rent that covers the original value of the good, plus the financial burden, and additional expenses covered by the contract.
FINANCIAL LEASE OR LEASING
DEFINITION:
Financial leasing is understood as the contract by which the lessor grants the use and enjoyment of certain goods, furniture and real estate, for a period of forced compliance to the lessee, the latter being obliged to pay a lease fee and other costs established by the lessor. At the end of the stipulated term, the lessee will have the option to buy the property at a predefined price, return it or extend the term of the contract for subsequent periods.
ELEMENTS:
to. Personal items:
1. Supplier: The natural or legal person, Salvadoran or foreign, who transfers the ownership of the property object of the contract to the lessor. The supplier may be a person who is habitually or professionally engaged in the sale of goods, or a person who occasionally alienates a good or the lessor itself, that is, the giver or supplier must be a financial entity or a company whose purpose is operations financial.
2. Lessor: The natural or legal person who delivers goods under financial leasing to one or more tenants.
3. Lessee: The natural or legal person, national or foreign, who upon entering into a financial lease, obtains the right to the economic use, enjoyment and exploitation of the property, under the respective contractual terms and conditions.
b. Essential elements:
1. The thing, the good or goods: Refers to the good that will be leased.
2. The price: That is determinable when becoming demandable.
3. Time: In the lease, as its temporary nature indicates in the definition, time is an essential element.
C. Validity elements:
1. Ability to enjoy and exercise
2. Absence of defects of consent.
OBLIGATIONS:
• Obligations of the Supplier
The Provider's obligations are:
a) Deliver the object under financial lease to the lessee when the lessor authorizes it;
b) Ensure that the assets to be leased are free of any encumbrance, in good working order and without hidden defects.
c) Respond for the claims covered by the guarantees of the leased assets.
d) Comply with consumer protection laws; and
e) Others agreed between the parties.
• Obligations of the Lessor
The Lessor who enters into a financial lease is obliged to:
a) Pay the supplier in a timely manner the agreed price of the good;
b) Maintain the leased assets, free of liens during the term of the contract, to ensure the quiet possession, use and enjoyment of the property by the Lessee.
c) Sanitation by eviction; and
d) The other obligations freely stipulated between the parties and those indicated in this Law.
The Lessor, with the prior agreement of the parties, may assign to the Lessee all the rights and actions that he has in this regard against the Supplier.
In the cases in which the Lessor is also a Supplier, the obligations stipulated in Article four of this Law shall also apply to him.
• Obligations of the Lessee
The Lessee undertakes, during the term of the financial lease, to:
a) Pay the income or royalties within the term stipulated in the contract;
b) Assume the risks and benefits associated with the purely physical and economic nature of the good;
c) Respond, civilly and criminally, for the use of the leased asset;
d) Respect the property right of the goods and enforce it against third parties. Therefore, in bankruptcy events, bankruptcy, or forced restructuring of obligations, the assets under financial lease exploited by the Lessee, will not be part of its mass of assets and will be excluded from it for the purposes of law; and
e) The other obligations freely stipulated between the parties and those indicated in this law.
THERE ARE SEVERAL KINDS OF LEASING:
A. Financial Leasing.
The financial lease is one through which a company (financial lessor) undertakes to purchase an asset to grant its use to a client (lessee), during a forced period, the lessee in turn undertakes to pay a rent, which can be fixed from the beginning between the parties, as long as it is sufficient to cover the acquisition value of the asset, and if applicable the accessory costs applicable.
At the end of the contractual relationship, the lessee can choose to buy the asset at a lower price than the market, which can be set from the beginning of the contract, extend the term of the contract to lower incomes than the previous ones or participate with the lessor of the sale of the property to a third party.
B. Pure Lease.
It follows the basic principles of financial leasing with the exception that it grants possession, but does not establish a mechanism to grant ownership. In this modality of the lease, the lessee does not have the option to buy the property at the end of the contract, so the lessor will give notice of the termination of the contract, in said notification, the market value of the property will be.
In the event that the lessee does not buy the property, the lessor may sell it to a third party at market value or give it to a third party in a pure or financial lease, without these being considered terminal options.
C. Sale & Lease back.
It consists of the sale of a property owned by the lessee to a financial lessor and the latter, in turn, leases it to the lessee.
This improves the liquidity conditions of the latter, since it allows him to enjoy the services of the asset in exchange for successive payments for the same during the term of the contract, even having received a sum of money for the same asset upon having sold it. You should consult with each lessor, which are the assets subject to this type of financing.
In accounting terms, leasing represents an expense so that in various parts of the world it can be deducted from your income with the consequent tax relief.
FORMALIZATION OF THE CONTRACT
The financial lease contract must be in writing, either in a public deed or in an authenticated private document. In order for said contract to be enforceable against third parties, it must be registered in the Commercial Registry, the costs and rights caused by said registration being paid by the Lessee, unless expressly agreed otherwise.
TERMINATION FORMS
At the end of the contract, the lessor can decide between the following options:
1. Exercise the purchase option. Paying for the good a percentage of the original value, which from the beginning can be agreed, as long as the resulting amount is less than the market value of the good, when exercising it.
2. Participate in the proceeds of the sale of the leased asset. The Lessor will put the property under lease for sale and will give the lessee a percentage (to be determined by the parties by mutual agreement) of the amount obtained.
3. Renew the contract with a lower amount of income. In other words, prolong the contract time, reducing the amount of the rents that until that date the lessor had been paying.
PROHIBITIONS
Lessees may not transfer or transmit the assets covered by the financial lease agreement, nor perfect real guarantees on them for contracted obligations, nor include them within the mass of assets in events of insolvency, bankruptcy, dissolution, liquidation or reorganization of obligations. The Lessor may obtain compensation for the damages caused by said acts or actions of third parties, without prejudice to the penal sanctions that may apply.
INCOME AND CONTRACT DEADLINES
The contractual term is a right of the Lessor, which may not be modified without its acceptance and full compensation for the damages caused by said modification. For all legal purposes, it is presumed that the Lessor suffers, due to the modification of the contractual term, damages for the amounts of money that he would have received if the contract had been in force, which may be estimated contractually.
The Lessee's obligation to pay the rents or royalties derived from all financial leasing contracts, is unconditional and, therefore, becomes enforceable in any event, whether or not the Lessee is exploiting the property, because the risks the exploitation of the property is entirely and exclusively on its account.
The foregoing shall not apply when the causes of the non-use or exploitation of the leased asset are attributable to the Lessor.
INSURANCE
The parties may agree on insurable risks, according to the nature of the assets. All insured and uninsured risks are borne by the Lessee.
The beneficiary of the insurance policy will be the Lessor; and the Lessee will be responsible for any deductible or amount that the settlement does not cover. Any surplus resulting from a liquidation, after covering all the costs and expenses of the Lessor as well as the obligations of the contract, will be reimbursed to the Lessee.
TAXATION
All the tributes, taxes, rates, fines, sanctions, infractions or penalties that impose the possession, possession, exploitation or circulation of the goods given in lease will be covered by the Lessee.
IMEMBARGABILITY
Any controversy regarding the claim to incorporate into the bankruptcy estate or the liquidation of a Lessee, assets under lease, must be resolved by recognizing the exclusive right of ownership of the Landlord and denying any claim to incorporate such assets within the bankruptcy estate. or liquidation of the Lessee. For its part, the Lessor in the event of bankruptcy may not incorporate into its mass of assets those granted under lease.
APPLICATION
• Leasing paid in expired periods
If a financial leasing contract is made, in which the cost of the property is determined by $ C and by which the lessee agrees to pay a monthly rental fee of $ R, for n months and at the expiration of the contract, the lessee has the option to acquire the property for $ S. If the landlord wants to earn a rate i. The value equation will be mathematically:
C = R an¬i + S (1 + i) -n
The above can be clearly seen by preparing a table for a leasing for such a situation.
EXAMPLE: The cost of a capital asset of $ 800,000, with a ration of six months and with a purchase option value at the expiration of the contract, equivalent to 10% of the cost value. Assume a rate of 4% effective monthly and that the lease fee is past due.
SOLUTION: The value equation is given by:
800,000 = R a6¬4% + 80,000 (1 + 0.04) -6
R = 140,548.57
The payment made by the company for the financial leasing of goods represents an expense and is therefore tax deductible, producing a tax benefit.
The leasing table is equal to an amortization table:
|
n |
Option to buy |
Interest |
Canyon |
Amortization |
|
0 |
800,000 |
|||
|
one |
691,451.43 |
32,000 |
140,548.57 |
108,548.57 |
|
two |
578,560.92 |
27,658.06 |
140,548.57 |
112,890.51 |
|
3 |
461,154.79 |
23,142.44 |
140,548.57 |
117,406.13 |
|
4 |
339,052.41 |
18,446.19 |
140,548.57 |
122,102.38 |
|
5 |
212,065.94 |
13,562.10 |
140,548.57 |
126,986.47 |
|
6 |
80,000 |
8,482.64 |
140,548.57 |
132,065.93 |
• Leasing paid in advance periods
If a financial lease is made, in which the cost of the property is determined by $ C and by which the lessee agrees to pay a monthly rental fee of $ R, for n months payable at the beginning of each month. Upon expiration of the contract, the lessor has the option of acquiring the property for $ S. If the lessor wishes to earn a rate i. it must be taken into account that, if the lease fee is advanced, the first payment will be made in period zero; that is, it covers the period from 0 to 1 and the last payment is made in n - 1 and corresponds to the period that begins in n - 1 and ends in n. In addition, since n corresponds to the expiration of the contract, this is where the purchase option for $ S is. Then the value equation will be mathematically:
C = R än¬i + S (1 + i) -n
C = R an¬i (1 + i) + S (1 + i) -n
Faced with this type of leasing payment and applying it to the previous example, the lease fee will be:
800,000 = R a6¬4% (1 + 0.04) + 80,000 (1 + 0.04) -6
R = 135,142.86
In period zero, the table starts with a purchase option of:
S = 800,000 - 135,142.86
S = 664,857.14
Therefore, only five leases remain to be paid, plus the final purchase option:
|
n |
Option to buy |
Interest |
Canyon |
Amortization |
|
0 |
664,857.14 |
|||
|
one |
556,308.57 |
26,594.29 |
135,142.86 |
108,548.57 |
|
two |
443,418.05 |
22,252.34 |
135,142.86 |
112,890.52 |
|
3 |
326,011.91 |
17,736.72 |
135,142.86 |
117,406.14 |
|
4 |
203,909.53 |
13,040.48 |
135,142.86 |
122,102.38 |
|
5 |
76,923.05 |
8,156.38 |
135,142.86 |
126,986.47 |
|
6 |
0 |
3,076.95 |
80,000 |
76,923.05 |
The lessee cannot calculate the IRR in a leasing contract, since the calculation of a IRR requires that there be income and expenses and the lessee only has expenses; however, if the income generated by such a good is taken into account, then it is feasible to calculate an IRR. In the case of the lessor, if a IRR of the leasing can be calculated, since his expense is the cost of the good that is purchased and his income is the rental lease that he receives, plus the purchase option. From the above it follows that, if the lessee wishes to evaluate investment alternatives, where one of them is a leasing, the use of the VPN may be more advisable than the IRR.
BIBLIOGRAPHY
www.google.com
1. FINANCIAL LEASE LAW
www.abansa.org.sv/html_marcolegal/ley_arrendamiento_financiero.pdf
2. MATHEMATICAL CRITERIA FOR FINANCIAL LEASING (LEASING)
www.gestiopolis.com/criterios-matematicos-arrendamiento-financiero-leasing/
3. FINANCIAL LEASE
www.condusef.gob.mx/cuadros_comparativas/arrendadoras/arrendadoras
