Questions | Answers |
What is the ratio of your company’s capital lease to operating lease? | It varies from firm to firm. If the firm owns its own property, the capital lease is high. Otherwise, the typical firm has more operating lease. |
Do you have plans to make change about the lease because of the debt covenant from the bank? | Depends. If the accounting standards increase the cost of capital, the management considers to modify the lease terms. |
Does your firm have any accounting department or hire outside accountant? | It is more cost efficient to hire an outside accountant compare to hire a full time employee. |
Will the company suffer from the change of the accounting standard? | Depends on the tax consequences since it might affect the tax liability. |
Do you have plans to modify the lease terms because of the accounting standards change from GAAP to IFRS? | If the benefit were more than the cost of the transaction, the management would change the lease terms to minimize cost. |