What Is a Lease Balance?

Lease income refers to the rental income obtained by enterprises other than professional leasing companies who temporarily lease property such as fixed assets and packaging materials. The rental income of professional leasing companies is reflected in the production and operating income. Rental income is an important part of accounting. It is one of the basic tasks that an accountant must master.

Rental income

Rental income (Leasehold Income), also known as rental income , refers to

Recognition of rental income should generally be recognized when the rental has been received or evidence of obtaining rental income has been obtained.

Recognition of rental income:

The rental income of an enterprise, including the income from the lease of fixed assets, packaging materials and other use rights of assets other than the concession rights, shall be fully included in the total income, and the income shall be recognized according to the following principles:

I. Confirmation of income time

Processing of one-time collection or payment of rental fees:

Accounting of TV channel rental income

[Example 1] Due to its abundant channel resources, Starlight TV Channel leases externally. A small local TV station decided to rent its channel due to its own limited capacity. It was signed in August 20 × 4

According to Article 225 of the Contract Law, regarding the vesting of lease income, in general,

Ministry of Finance,

Personal property rental income is subject to personal income tax in accordance with a certain percentage of its income, that is, personal income tax on personal rental income is an ad valorem tax. Then, according to the characteristics of ad valorem tax, if the tax calculation basis-the smaller the amount of personal rental income, the correspondingly less personal income tax should be paid. According to this, when planning tax saving for personal rental income, it is possible to appropriately reduce the nominal income of the lease while keeping the actual income unchanged, thereby effectively reducing tax expenditures. In real life, when renting out their own houses, facades, equipment and other properties, individuals always bear the surviving costs and related costs of these properties themselves, and simply charge the renter a fixed rent. For example, when an individual rents his or her own house, sometimes he promises that all three fees for water, electricity and heating are included in the rental income, without the tenant paying another fee, but only collecting the rental income of the tenant's house. As the three fees are included, their rental income is also relatively high.

In fact, from the perspective of tax saving, this approach of the lessor is not desirable. Because higher rental income has to pay more personal income tax, and the lessor also has to bear the cost of three fees, so the net income after tax that the lessor eventually gets will be greatly reduced accordingly. Instead, the lessor can adopt a method of reducing the nominal income, changing the original expenses incurred by the lessee to reduce the rental income accordingly. In this way, the personal income tax to be paid by the individual will also be reduced. Eventually, the income after tax will Will increase.