Q:
Is it on or off the borrower's balance sheet?
A:
On the balance sheet
Q:
What portion of the instalments are expensed for Australian Accounting Standard purposes?
A:
The interest component of each instalment is expensed.
Q:
What proportion of the instalment is tax deductible?
A:
The interest component of each instalment will generally be tax deductible. However, the
Borrower can also claim depreciation deductions on the equipment.
Q:
Are up front deposits allowable?
A:
Yes.
Q:
Must there be a residual value?
A:
No. Generally, chattel mortgages would amortize to zero, but a bullet payment might be
structured as the last payment.
Q:
When is Goods & Services Tax payable?
A:
The Borrower must pay all the GST upfront to the equipment supplier.
At the discretion of the Lender, the Lender may or may not finance the GST portion.
The accounting and taxation treatment of financial products is subject to change. We strongly recommend that you seek independent advice from your taxation and accounting adviser. Please refer to the
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