Question

2-Explain the approaches, firms may use to disclose their exposure to market risk . 3-Bring out...

2-Explain the approaches, firms may use to disclose their exposure to market risk .

3-Bring out the risls that the Lessor is exposed to.

1-Explain the Analytical issues regarding lease accounting methods

4-Discuss the Special lease transactions that financial institutions operate.

Homework Answers

Answer #1

2. Approaches firm use to Disclose their exposure to Market risk

Market risk is risk of Losses that arises from movement in markeet prices, Common Market risks can be define As Equity Risk, Interest rate risk

3. Lessor is owner so lessor is exposed to financial risk

1. Leasing as form of financing of capital investments remains popular with a lack of own fund for real investment , it allows the lessee company to acquire the necessery assets without withdrawing substantial financial resources from its turnover. so accounting purpose methodology to used like hire purchase method .

4. A Finance lease is( know as capital lease also) a type of lease in which financial company is typically the legal owner of the asset for the duration of the lease. here lessor purchase asset and lessee use the asset pay rent during life of lease

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