I’m confused that the interest is 62% of the expected payments. I must be missing something.
Extracted from a financial statement:
Approximate future minimum lease payments under capital and all other leases = $1,305M.
Imputed interest = $813M.
Could someone please enlighten me? Thank you.
\I am not an account here and can’t see rest of accounts. Does 813 appear in this year’s income statement?
but my guess would be the capital pauments are on a present value basis but the interest is the absolute amount
Interest is for whole term of leases
10 year bond pay in 5% coupon at 9% interest rate PV = 74
Total interest = 5 x 10 = 50
total Interest / present value 50/74 = 67%
Thank you MikeyF. Your guess’s most likely right. The report doesn’t share the discount rate or lease term details. Good luck for your career. 
