Leases
KNOWLEDGE EXPECTED OF: QAFP® Professionals
Highest Knowledge Level: Evaluation
Knowledge Levels and Associated Verbs
|
Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
|
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
|
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
|
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
|
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|---|---|---|---|---|---|---|---|---|---|
|
Define
To state exactly the meaning of
|
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
|
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
|
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
|
Compare
To note the similarities and differences between two or more things
|
Estimate
To determine an approximate value for
|
Calculate
To find the value using mathematics
|
Convert
To change from one form or purpose to another
|
Evaluate
To reach a conclusion or make a through careful study
|
Interpret
To give the meaning of / to construe or understand / to translate orally
|
Hold cursor over or click on each term to read its definition.
- Define a lease.
- Define the parties to a lease.
- Lessee
- Lessor
- Identify assets that may be leased.
- Explain the purposes for which a lease may be used.
- Explain for whom a lease may be suitable.
- Explain the terms of a lease, such as:
- Interest rate
- Length of term
- Payment
- Amortization
- Residual value
- Buyout value
- Fees
- Calculate the terms of a lease for a personal vehicle.
- Identify that penalties may exist on a lease.
- Identify the individuals for whom lease payments may be tax-deductible, such as:
- Employees
- Commissioned employees
- Sole proprietors
- Partners in a partnership
- Determine how each of these factors may impact the decision to purchase a vehicle:
- Impact on cash flow
- Maintenance costs for normal wear and tear
- Warranty coverage (inclusions, exclusions, length)
- Expected usage life of the vehicle by the owner
- Expected plans by the owner for the vehicle after expected usage life
- Expected residual value of the vehicle at end of the owners’ expected usage life
- Tax impact
- Cost
- Fees or charges
- Evaluate how each of the factors may impact the decision to purchase a vehicle.
- Determine how each of these factors may impact the decision to finance a vehicle:
- Impact on cash flow
- Ownership of the vehicle
- Maintenance costs for normal wear and tear
- Warranty coverage (inclusions, exclusions, length)
- Expected usage life of the vehicle by the financee
- Expected plans for the vehicle after usage life by the financee
- Expected residual value of the vehicle at end of usage life by financee
- Tax impact
- Cost
- Term of the payments
- Fees or charges
- Interest cost
- Covenants required of financee
- Evaluate how each of the factors may impact the decision to finance a vehicle.
- Determine how each of these factors may impact the decision to lease a vehicle:
- Impact on cash flow
- Ownership of the vehicle
- Maintenance costs for normal wear and tear
- Maintenance costs for excess wear and tear
- Warranty coverage (inclusions, exclusions, length)
- Usage restrictions, allowances and expected use of the vehicle
- Expected usage life of the vehicle by the lessee
- Expected plans for the vehicle after expected usage life by the lessee
- Expected residual value of the vehicle at end of expected usage life by lessee
- Tax impact
- Cost
- Term of the payments
- Fees or charges
- Interest cost
- Covenants required of lessee
- Evaluate how each of the factors may impact the decision to lease a vehicle.
KNOWLEDGE EXPECTED OF: CFP® Professionals
Highest Knowledge Level: Evaluation
Knowledge Levels and Associated Verbs
|
Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
|
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
|
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
|
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
|
||||||
|---|---|---|---|---|---|---|---|---|---|
|
Define
To state exactly the meaning of
|
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
|
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
|
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
|
Compare
To note the similarities and differences between two or more things
|
Estimate
To determine an approximate value for
|
Calculate
To find the value using mathematics
|
Convert
To change from one form or purpose to another
|
Evaluate
To reach a conclusion or make a through careful study
|
Interpret
To give the meaning of / to construe or understand / to translate orally
|
Hold cursor over or click on each term to read its definition.
- Define a lease.
- Define the parties to a lease.
- Lessee
- Lessor
- Identify assets that may be leased.
- Explain the purposes for which a lease may be used.
- Explain for whom a lease may be suitable.
- Explain the terms of a lease, such as:
- Interest rate
- Length of term
- Payment
- Amortization
- Residual value
- Buyout value
- Fees
- Calculate the terms of a lease for a personal vehicle.
- Identify that penalties may exist on a lease.
- Identify the individuals for whom lease payments may be tax-deductible, such as:
- Employees
- Commissioned employees
- Sole proprietors
- Partners in a partnership
- Determine how each of these factors may impact the decision to purchase a vehicle:
- Impact on cash flow
- Maintenance costs for normal wear and tear
- Warranty coverage (inclusions, exclusions, length)
- Expected usage life of the vehicle by the owner
- Expected plans by the owner for the vehicle after expected usage life
- Expected residual value of the vehicle at end of the owners’ expected usage life
- Tax impact
- Cost
- Fees or charges
- Evaluate how each of the factors may impact the decision to purchase a vehicle.
- Determine how each of these factors may impact the decision to finance a vehicle:
- Impact on cash flow
- Ownership of the vehicle
- Maintenance costs for normal wear and tear
- Warranty coverage (inclusions, exclusions, length)
- Expected usage life of the vehicle by the financee
- Expected plans for the vehicle after usage life by the financee
- Expected residual value of the vehicle at end of usage life by financee
- Tax impact
- Cost
- Term of the payments
- Fees or charges
- Interest cost
- Covenants required of financee
- Evaluate how each of the factors may impact the decision to finance a vehicle.
- Determine how each of these factors may impact the decision to lease a vehicle:
- Impact on cash flow
- Ownership of the vehicle
- Maintenance costs for normal wear and tear
- Maintenance costs for excess wear and tear
- Warranty coverage (inclusions, exclusions, length)
- Usage restrictions, allowances and expected use of the vehicle
- Expected usage life of the vehicle by the lessee
- Expected plans for the vehicle after expected usage life by the lessee
- Expected residual value of the vehicle at end of expected usage life by lessee
- Tax impact
- Cost
- Term of the payments
- Fees or charges
- Interest cost
- Covenants required of lessee
- Evaluate how each of the factors may impact the decision to lease a vehicle.
Additional Knowledge Expected of CFP Professionals
- Define the main types of leases.
- Capital lease
- Operating lease
- Compare operating and capital leases.
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