The Effect Of Operating Leases And Finance Leases To The Financial Statements

Hong Kong's leasing industry is stepping into the period of mature and active time nowadays. Its turnover volume increases at a proportion of 20 percent annually. Its operation has spreaded to the world instead of being only limited to the inner of Hong Kong. In the late 1990s, its international leasing industry had developed rapidly. And Hong Kong's leasing industry has a wide range of objects, especially the container leasing, which takes up an irreplaceable place.The global container leasing market reached its peak in recent two years that the container equipment's price and the rent fare, to the demand and use ratio of the container all are increasing, of which the rent fare of the container increased over 50 percent. Meantime, the purchase amount of the newly made container of the container leasing company has been increasing. By statistics, the global investment for containers reached 2.1 billion US dollars in 2003 and it arrived at 2.6 billion USD in 2004. It is clear that the leasing industry is developing fast and in a large scale.The paper firstly introduced the background and the meaning of the subject. Then the author described the basic condition of the company systematically, including its operation method, benefiting mode and its finance policy of after-sale leasing. By analyzing the company's leasing mode, the author found that the selection of depreciation and different leasing modes can affect the financial statements greatly, which can even impact on the decision of the investor and the managers of the company. Therefore, the author did some research on the cause of the effects and made some proposals.