The principles that guide the accounting for a lease from an IFRS for SMEs perspective don’t always line up with the principles for accounting or a lease from an Income Tax Act and VAT
Act perspective, for e.g., a finance lease for accounting isn’t always treated as such for Income Tax and VAT purposes.

Are you familiar with the varying treatments of a lease for accounting, current tax, and VAT calculation purposes?

Do you know how these three perspectives affect each other?

An operating lease and finance lease will be followed through the following sets of legislation and standards:

• Accounting:
  IFRS for SMEs – Section 20 Leases
• Income
  Tax Act
• VAT
  Act (how it affects the above two)

The above will be considered from both the lessor and lessee’s perspective.

Practical examples will be used with amounts to illustrate the differences and how the varying sets of legislation / standards interplay.

Various definitions will be introduced and explained, including: Instalment sales agreement / hire-purchase agreement, instalment credit agreement, finance lease, financing of VAT.

EXCLUDED from presentation: deferred tax, leases of fixed property

This session will look to simplify the differing treatments of finance and operating leases based on the respective sets of legislation or standards so that you will know how to apply
the varying principles in determining / calculating the accounting effect, the current tax effect and the VAT effect.