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Finance Lease

error with leasing company

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client has bought a new van  - cost approx £25k net of vat on a finance lease

the lease agreement (signed) shows total lease payments of only £22k net of vat

we'd normally expect the total lease payments to be inexcess of the purchase price and there to be an element of interest being paid

it seems the lease company may have messed up on the agreement, the client thinks so and doesn't want to go back to them in case they want to put it right!

question is how do we account for the shortfall in the lease payments compared to the vehicle cost?

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14th Dec 2018 18:09

Are you certain the difference wasn't something like a part exchange?

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By frankfx
14th Dec 2018 19:18

http://www.legislation.gov.uk/ukpga/2006/35/section/11

and code of ethics for accountants with all accounting bodies may be instructive.

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14th Dec 2018 21:59

I the client is paying £22k, that’s the cost (to capitalise)

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By tom123
15th Dec 2018 08:23

Must be quite a posh van - mine cost £16k

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By tom123
15th Dec 2018 08:25

If there was original paperwork at a higher price, then I would query it - as an error or omission.

If, however, you are just assuming a list price of £25k then I would't worry.

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