Residual Values
Lessee accounting for RV
- Makes a difference to lessee if RV is guaranteed or not.
Unguaranteed RV:
- PV payments equals the total liability. Amortization is based on this alone. RV is ignored by lessee as it is not their concern.
- Accounting for the lessor and lessee may be asymmetrical because the lessor is considering the RV while the lessee is ignoring it.