Fitch Ratings said it has completed a peer review of five rated aircraft lessors
, resulting in the affirmation of the long-term Issuer Default Ratings (IDRs) of AerCap Holdings N.
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Network (GLN), a community of more than 500 lessors
from around the world who are ready to provide local leasing expertise and transact with lessees that fit their credit appetite, equipment interests, and geographic footprint.
and the Lessee may be referred to jointly as the "Parties," and each separately as a "Party.
Ernst & Young is concerned about the conceptual basis for a lessee recognizing a liability for lease payments that do not represent an unconditional obligation and similarly for a lessor
recognizing a receivable for amounts other than those that the lessor
has an unconditional right to receive.
An operating lease, put simply, is a lease where the lessor
takes residual risk on the asset and rent is broadly based on the actual cost (including depreciation) and profit margin to the lessor
, with the lessor
taking back the asset at the end of the lease.
If a question exists as to the reasonableness of the rent, the parties may consider adding a clause to the agreement (before entering into it) providing for repayment by the lessor
of any disallowed rents.
In its present position, paragraph 31 may be interpreted by lessees as confirming their eligibility to claim input tax credits (ITCs), because affected taxpayers may stop reading once they encounter an example where the lessor
can claim an ITC for the repair services.
The car must come back to the lessor
in its original condition or you pay to restore it.
RENTAL AND OTHER PAYMENTS: A lease also will contain a provision that describes the rental and other payments you're required to pay the lessor
during the term of the lease.
Companies that want to deduct cancellation payments should not lease replacement property from the original lessor
In either circumstance, the lessor
will probably be open to discussing these options, since they have a familiar, ready and willing customer.
If the lessor
wants to operate his lease (asset) to make profit, he will provide assets on hire to others for use under an agreement.