Articles on Leasing

Our Latest Publications:

• New!Leasing industry poised for big change as 50 years old lease accounting standard changes, by Vinod Kothari, 21st January, 2016
• New! GST on Leasing & Hire-purchase Transactions, by Vinod Kothari, 19th January, 2016
• New!Two New Subsidiaries: Sweet spot for NBFCs and Asset Leasing Companies, by Ameet Roy, 02nd January,2016 
• VAT exemption on lease of solar assets in UP, by Surbhi Mohata, 27th November, 2016
• Key changes made by way of the Maharashtra State (Amendment) Act, 2015, by Niddhi Parmar, 16th May, 2015
• Financial leases no longer will qualify for lessor depreciation, by Vinod Kothari, 12th January, 2015
• Leased Assets qualify for Industrial Undertaking purposes holds Bombay High Court,by Aditya Shah,1st September,2014 
• White Clarke’s report indicates worldwide growth in leasing for 2012, by Abhirup Ghosh, 19th May, 2014
• Conditional Sale and Credit Sale – thin line distinguishing security interest and absolute sale, by Nidhi Bothra, January 7, 2014
• Availability of Input Tax Credit in lease transactions, by Nidhi Bothra, December 6, 2013
• Burns of the past continue to haunt SLB transactions – First leasing case, by Nidhi Bothra, November 30, 2013
• Presentation on Construction equipment financing used by Vinod Kothari at Excon, 22nd November, 2013
• Report on Equipment Leasing Market in India, 2012-12, 12th November, 2013
• Report on Indian Commercial Vehicle Finance Market: Present and Prospects, by Team Vinod Kothari Consultants Pvt. Ltd, 10th October, 2013
• Report on Leasing in Indonesia, by Abhirup Ghosh and Shampita Das, 20th September, 2013
• Depreciation dichotomy between Accounting Standard and Tax Laws on Financial Lease Transaction, Nidhi Jain, 3rd January, 2012
• Note on Stamp duty on lease transactions in Maharashtra, Nidhi Ladha, 8th January, 2011
• Article on Law of Assignment of Receivables, Vinod Kothari, 6th January, 2011
• IASB’s exposure draft on leasing – The end of finance-operating lease distinction – Vinod Kothari, 19 August, 2010
• How secure is secured financing – experience of CRE lending, leasing, aircraft financing etc from world over suggests that it is important to model asset values besides credit risk – says an article in ERisk portal – click here
• Leasing: true lease or financing in disguise – article by Tracy Treger and another
• Leasing – true sale or secured financing – article in LJN Equipment Leasing newsletter
• Another detailed article on accounting under the new standard AS 19
• Article on Accounting under Indian accounting standard AS 19
• Article on Cross-border leasing by David H. Bamberger 
• Article on problems in Indian leasing in view of recent accounting standards
• Moody’s on off-balance-sheet treatment to lease
• E-commerce: what it holds for leasing companies
• Power of the Collateral – how personal property interests are created, perfected and enforced

Leasing Articles by Topic:

​Contemporary-

• Article on International Cross-Border Tax Leasing David H. Bamberger : This article focuses on the tax nuances of the complex world of cross border leases. David Bamberger is associated with Coudert, an international law firm.
• E-commerce: what it holds for leasing companies: The trend towards leasing companies offering services through the internet is growing very fast. Steven Gilyeart in this article examines implications of this trend and advises companies to prepare for the e-commerce revolution.
• Bank mergers – analysis of motivation, economies and trends: The past few years have marked a spate of mergers in banking and financial services. This insightful article by McKinsey’s analyses what are the motivations behind this forceful trend, searches the evidence of economies of scale in concluded mergers, and star-gazes the likely trends. “The industry might take the model of the airlines industry”, concludes the article. A must reading for all finance professionals.
• Credit Lessons from the Asian currency crisis: Based on a special report by Duff and Phelps Credit Rating Co., this article is aimed at learning lessons for the credit manager from the Asian. It demolishes several myths of traditional financial analysis – a must read for all those concerned with credit management.
• Financial crisis in emerging markets: This article by the Research Department of IMF gives you a thorough insight into the crisis that rocked emerging markets and lessons to be learnt therefrom.
• Computer leasing is good business, but…: This article gives you all that you wanted to know about how to benefit from the recent depreciation rate hike for computers, opportunities, risks and protection measures.

Basic Concepts and Issues-

• Thirteen basic questions to ask about leased equipment: The choice of the equipment to lease is as much important as the evaluation of the lessee. This article details the elementary questions a lessor should ask before agreeing to lease any equipment.
• All about leveraged leasing: The concept of leveraged leasing, essentially leasing with other people’s money, is enticing and complicated. This article explains the nitty-gritty of leveraged leasing.

Characteristics of Leases-

• True lease: the Basis of a Lessor’s legal rights: This article stresses on the technical differences between lease and plain financing transactions based on the risks and rewards on the asset the lessor takes. If the transaction has no concern with the asset at all, it partakes the character of a financial transaction from legal and taxation viewpoint. This is true in case of hire-purchase transactions also. Author stresses on the legal and commercial need to distinguish leases from financing transactions.
• Classification of leases for accounting and tax purposes: Classification of leases as financial and operating leases for accounting and tax purposes is a complex and controversial issue. Harmony in tax and accounting principles is missing in most countries, leading to a dual classification. The author dwells upon the dilemma and develops a model to resolve it.

Internet and E-Commerce-

• E-commerce: what it holds for leasing companies: The trend towards leasing companies offering services through the internet is growing very fast. Steven Gilyeart in this article examines implications of this trend and advises companies to prepare for the e-commerce revolution.

Management of Lease Business-

• Evaluating your leasing company: Key ratios to measure performance and standing: This article gives a listing of important ratios that measure the performance, quality and strength of a leasing company. An excellent guide to a strategic manager, investor, acquirer etc.
• Repossession of Leased Assets: An International Perspective: In this highly informative article, the author outlines various legal considerations in repossession of assets, with or without judicial intervention, arbitral references, and educates on the need to tone up legal systems to perfect the repossession machinery.

Credit Collection-

• Power of the Collateral – understanding the significance of asset security: This article by Heywood Fleisig examines the practices in creating, perfecting and enforcing security interests in movable properties and the legal difficulties created by inefficiencies of the system. The article comes up with suggestions on a favourable legal mechanism for enforcing security interests.

Legal Issues and Documentation-

• Leasing: true lease or financing in disguise – article by Tracy Treger and another
• Leasing – true sale or secured financing – article in LJN Equipment Leasing newsletter
• Lessor’s guide to lease documentation: This article gives a clause-by-clause guide to documenting a lease agreement. Obviously, a careful document is the foundation of strong credit. A must read for all lessors.

Accounting Issues-

• Another detailed article on accounting under the new standard AS 19: This article by Vinod Kothari discusses in details the requirements of the new accounting standard with hints as to characterisation of leases as operating leases.
• Accounting for Leases: AS 19 in India: This article by Vinod Kothari discusses the salient features of accounting standard no. 19 on lease accounting.
• Moody’s on off-balance sheet leases: off-balance-sheet treatment to leases has been in the thick of controversy ever since G4+1 countries initiated debate on accounting for operating leases. Moody’s, the renowned rating agency, also does not like off-balance-sheet treatment for leases – see how, in this article. The article is in PDF format and you would need to instal Acrobat Reader before being able to read it.
• Classification of leases for accounting and tax purposes: Classification of leases as financial and operating leases for accounting and tax purposes is a complex and controversial issue. Harmony in tax and accounting principles is missing in most countries, leading to a dual classification. The author dwells upon the dilemma and develops a model to resolve it.
• Why Proposed Changes in IAS-17 should be reviewed before implementation: Based on a study by McGregor of Australia, the International Accounting Standards Committee recently mooted a proposal to amend the international accounting standard on Lease Accounting, IAS-17. It issued an Exposure Draft of the proposed standard. The article critically examines the proposals and recommends that the proposals of McGregor require a thorough re-examination. Plus, it contains a review of the existing difficulties in IAS-17.

Leasing Industry in the World-

• Recent problems of Indian leasing in wake of accounting standards, etc.: This article by Vinod Kothari discusses the uncertain future of the Indian leasing industry in view of the recent proposal by the Institute of Chartered Accountants to revise accounting standard for leases.
• Indian Leasing: Thriving amidst nagging taxation infirmities: This article is properly captioned an overview of Indian leasing. It very succinctly captures the present position, competition, foreign entry, tax benefits, sales-tax problems, etc. of Indian leasing. A very concise yet comprehensive document on Indian leasing.
• Leasing in Pakistan: A holistic view: This article deals with the status of leasing in Pakistan especially with reference to its role in promoting investment, and takes a look at the hallmark of economic efficiency of the industry.
• Existing and emerging regulation of Leasing in Russia: This article deals with the status of leasing law and activity in Russia with profuse details of laws, taxation, VAT, customs etc. and discusses the details of the draft leasing law under formation.

 Leasing Articles by Authors:

• by Vinod Kothari
• by Steven Gilyeart
• by Richard Contino
• by David Holmgren
• by Barry S. Marks
• by IMF Research division
• by Saima Shah
• by Terry Winders
• by McKinsey and Company
• by Derek Bloom
• by various authors

Articles by Vinod Kothari:

Here is a collection of leasing articles by Vinod Kothari. These articles have been written over years and published in different media. In order to make them of generic interest, as also to update them, these articles have been revised and updated especially for the Net. In their current form, they are of generic interest to visitors from any country.

• Another detailed article on accounting under the new standard AS 19: This article by Vinod Kothari discusses in details the requirements of the new accounting standard with hints as to characterisation of leases as operating leases.
• Accounting for Leases: AS 19 in India: This article by Vinod Kothari discusses the salient features of accounting standard no. 19 on lease accounting.
• Recent problems of Indian leasing in wake of accounting standards, etc.: This article by Vinod Kothari discusses the uncertain future of the Indian leasing industry in view of the recent proposal by the Institute of Chartered Accountants to revise accounting standard for leases.
• Computer leasing is good business, but…: This article gives you all that you wanted to know about how to benefit from the recent depreciation rate hike for computers, opportunities, risks and protection measures. Click here for full text of the article. 
• Evaluating your leasing company: Key ratios to measure performance and standing: This article gives a listing of important ratios that measure the performance, quality and strength of a leasing company. An excellent guide to a strategic manager, investor, acquirer etc. Click here for full text of the article.
• Indian Leasing: Thriving amidst nagging taxation infirmities: This article is properly captioned an overview of Indian leasing. It very succinctly captures the present position, competition, foreign entry, tax benefits, sales-tax problems, etc. of Indian leasing. A very concise yet comprehensive document on Indian leasing. Click here for full text of the article.
• Another page on the current position of Indian leasing, commemorating 25 years of Indian leasing. 
• Page on Evolution of leasing in India. 

This article was published in Equipment Finance Journal, USA – 

• True lease: the Basis of a Lessor’s legal rights: This article stresses on the technical differences between lease and plain financing transactions based on the risks and rewards on the asset the lessor takes. If the transaction has no concern with the asset at all, it partakes the character of a financial transaction from legal and taxation viewpoint. This is true in case of hire-purchase transactions also. Author stresses on the legal and commercial need to distinguish leases from financing transactions. Click here for full text of the article.

This article was published in Fin-n-Lease, Newsletter of the Association of Leasing and Financial Services Cos., India. –

• Why Proposed Changes in IAS-17 should be reviewed before implementation: Based on a study by McGregor of Australia, the International Accounting Standards Committee recently mooted a proposal to amend the international accounting standard on Lease Accounting, IAS-17. It issued an Exposure Draft of the proposed standard. The article critically examines the proposals and recommends that the proposals of McGregor require a thorough re-examination. Plus, it contains a review of the existing difficulties in IAS-17. Click here for full text of the article.

This article was published in Monitor, USA.-

• India: A clean market for Cross-border Leases: This article is focused on the information needs of cross-border lessors wanting to do in-bound leases in India. The article discusses the regulatory framework, common law issues, taxation issues, etc. All that a cross-border lessor looking at India would expect to know. Click here for full text of the article.