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.