The aim of this paper is to make a comparison between classic credit financing and leasing. Here, the question is considered whether leasing can represent an attractive alternative to classic credit financing. Credit financing and leasing are then compared, taking into account tax, accounting and business management aspects. The previous findings are then illustrated using a case study in relation to the decision between credit financing or leasing a Mercedes-AMG A45. Finally, in a conclusion, a position is taken on the initially mentioned question.
Table of Contents
1. Introduction
1.1 Problem statement
1.2 Objective
1.3 Methodological approach
2. Theoretical foundations
2.1 Definition of leasing
2.2 Definition of credit financing
2.3 Differences between leasing and rent
3. Variants of leasing
3.1 Operate Leasing
3.2 finance lease
3.3 Leasing of movables
3.4 Real estate leasing
3.5 Full amortization lease
3.6 Partial amortization leasing
3.7 Direct leasing
3.8 Indirect leasing
3.9 Sale-and-lease-back leasing
4. Comparison leasing – credit financing
4.1 Tax aspects
4.2 Accounting aspects
4.3 Business aspects
4.4 Case study
Objective and Thematic Focus
The primary objective of this seminar paper is to conduct a comparative analysis between traditional credit financing and leasing as alternative methods for purchasing assets, evaluating their respective suitability for companies and private households.
- Comparison of leasing and credit financing models
- Detailed examination of leasing variants (e.g., operate vs. finance lease)
- Analysis of tax, accounting, and business-related implications
- Practical case study involving the purchase of a Mercedes-AMG A45
- Assessment of decision-making criteria for asset acquisition
Excerpt from the Book
2.1 Definition of leasing
The term leasing generally describes a right of permanent use of an investment or consumer good, but in which there is a clear difference to the characteristics of a conventional rental or lease agreement. The word leasing comes from the English language and means translated "rent" or "lease" (Feinen, 2012, p. 1f.). There are various different forms of leasing, which makes it clear how differently a leasing contract can be designed. In a leasing contract, an asset is provided to the lessee by a lessor for a certain period of time. The two contracting parties conclude a leasing contract in which the useful life, the amount of the monthly leasing installment and the leased object are agreed. The lessee therefore does not have to spend any acquisition costs on the leased asset, but only has to pay a monthly rent for the use of the leased object. (Jung, 2010, p. 774). A distinction is made between movable property leasing and real estate leasing, which refers to the mobility of the leased object (Goeke, 2008, p. 145). Leasing consists of components of the loan, the rent and the classic purchase transaction and is a special form of debt financing (Beigler, 2011, p. 15f).
Summary of Chapters
1. Introduction: Presents the problem statement regarding modern financing challenges and defines the objective and methodology of the comparison between credit and leasing.
2. Theoretical foundations: Provides essential definitions of leasing and credit financing while highlighting key differences between leasing and conventional rent agreements.
3. Variants of leasing: Categorizes and explains various leasing models including operate, finance, real estate, and special forms like sale-and-lease-back.
4. Comparison leasing – credit financing: Examines tax, accounting, and business aspects of both models, complemented by a practical case study for a motor vehicle purchase.
Keywords
Leasing, Credit financing, Operate leasing, Finance lease, Asset acquisition, Tax aspects, Accounting, Balance sheet, Debt financing, Sale-and-lease-back, Investment, Liquidity, Mercedes-AMG A45, Depreciation, Contractual obligations.
Frequently Asked Questions
What is the fundamental purpose of this paper?
The paper aims to evaluate whether leasing serves as an attractive and viable alternative to traditional credit-financed purchases for companies and individuals.
What are the central thematic fields covered?
The paper focuses on the technical definitions of financing models, the various legal and structural forms of leasing, and the comparative analysis of tax, accounting, and business implications.
What is the primary research question?
The core question is whether, given the diverse design options and financial impacts, leasing can be considered an effective alternative to classic credit financing.
Which scientific methodology is applied?
The author defines key terms, compares conceptual frameworks, and employs a case study of a specific vehicle purchase to illustrate the theoretical findings in a practical context.
What topics are discussed in the main body?
The main body covers the theoretical foundations of both financing methods, a detailed breakdown of different leasing variants, and an analytical comparison based on fiscal and economic factors.
Which keywords characterize this paper?
Key terms include leasing, credit financing, asset management, balance sheet effects, and amortization.
How does the tax treatment differ between the two models?
Leasing installments can generally be deducted as operating expenses, whereas credit financing involves depreciating the acquisition costs over the asset's useful life.
What role does the balance sheet play in the decision-making process?
Leasing can potentially keep the balance sheet unchanged if the lessor remains the beneficial owner, avoiding the balance sheet extension associated with credit-financed asset purchases.
- Citar trabajo
- Robin Lange (Autor), 2018, Leasing as an alternative to credit-financed purchase?, Múnich, GRIN Verlag, https://www.grin.com/document/1196184
