Hire-Purchase & Lease

How do I record a hire-purchase transaction?

What is the difference between hire-purchase and leasing?



image of fancy scroll lines



I have to say I had never heard of the term hire-purchase ... so I went looking.

At tutor2u.net, a UK based website, it explains the difference between the two. You can find the "lesson" at tutor2u.net/business/finance/finance_sources_assets_leasingintro.asp .

After reading their article, it sounds like hire-purchase financing is what I call a capital lease ... and (asset) leasing is what I refer to as an operating lease.

You will find my information on Capital Lease vs Operating Lease under The Practice button.

My information is based on Canadian accounting practices with comments on US practices.

The bookkeeping entries for a capital lease may not be appropriate for UK accounting practices as they are based on Canadian GAAP guidelines.

So I went looking again and found a good article written by UK CA Peter Taylor on the accounting and tax treatment of both. It is titled Accounting For Loans, Hire Purchase and Leasing.

You can find the article at howto.co.uk/business/bookkeeping-small-business/accounting_for_loans_hire_purchase_and_leasing/

Thanks so much for the question. I learned something new today ... which is always good! :0)

Click here to post comments

Return to Leases.

Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.

Enjoy A Tea Break With
Me Today. Let's Chat!

Use the search feature to quickly find the
information you're looking for.



SHORTEN
Your Learning Curve!

 



Warm up your tea cup and check out these chats ...

Click on image above to read the chat.








Join Me On Facebook

Help support this site by "liking" me! Here's where I post current information.

Listed Under Websites NOT Local Business.
This website is NOT associated with the business operating in Bonnyville AB.


A Handy Reference