Real Estate and Equipment Leases eBook

By September 23, 2016Featured, White Papers

The Similarities and Differences between Real Estate and Equipment Leases.

Real Estate Leases are from Jupiter. Equipment Leases are from Saturn.

Real Estate and Equipment Leasing eBook

Understand the Key Differences

Between Real Estate and Equipment Leases:

  • Ownership and Organizational Models
  • Rent Payment and Lease Structures
  • Critical Dates at Middle of Term and End of Term
  • Size and Scale

And the Similarities

Between Real Estate and Equipment Leases:

  • Accounting Treatment
  • End of Term Options
  • Lack of Investment and Prioritization

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Get Access to the eBook

Excerpt: Similarities and Differences Between Real Estate and Equipment Leases

There are some similarities between real estate and equipment leases. Both have been neglected and under-funded at most organizations. There has been little investment in the people, systems, and processes to support real estate and equipment leases. Real estate has gotten more attention over the past decade with centralized organizational models and new technologies such as integrated workplace management systems, but these new approaches have been limited primarily to large organizations. Equipment leases are not even recognized by most CFOs as a portfolio at most companies.

There are also many similarities between the accounting for both real estate and equipment leases. Both can have initial direct costs; fixed or variable rents; and end-of-term options to purchase, extend, or terminate. However, as you drill down, there are some important differences that become apparent when you are selecting a software vendor for lease accounting. For example, equipment leases often have multiple assets per schedule, whereas real estate leases typically only have one.

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