Notice No. 013/GGBM/95 of 28 December - Accounting for Leasing Companies

Bank of Mozambique
Notice No. 13 GGBM/95
Subject: Accounting for Leasing Companies

The Bank of Mozambique, pursuant to Article 12 of Decree No. 44/94 of 12 October, determines:

1. The accounting of financial leasing companies shall be governed, as of January 1, 1996, by the standards of the Chart of Accounts of the Banking System, provided they are applicable and do not contradict the provisions of the respective regulatory legislation and other complementary legislation.

2. For this purpose, the following adjustments are made:

2.1. The following accounts are created:

a) 086 - Deferred rents and residual values of financial leasing contracts

0860 - Deferred rents
Recording, according to the remaining terms to maturity, of the deferred rents of financial leasing contracts.

08600 - From contracts without overdue rents
Records the value of deferred rents related to contracts that do not have any values recorded in accounts 4470, 4471, 4472, or 085.

08601 - From contracts with overdue rents
Records the value of deferred rents related to contracts that have values recorded in accounts 4470, 4471, 4472, or 085.

0861 - Residual values
Recording, according to the terms remaining until the exercise of the purchase option, of the residual values of leased assets.

08610 - From contracts without overdue rents
Records the residual values related to contracts that do not have any values recorded in accounts 4470, 4471, 4472, or 085.

08611 - From contracts with overdue rents
Records the residual values related to contracts that have values recorded in accounts 4470, 4471, 4472, or 085.

b) 0976 - Debtors for deferred rents and residual values of financial leasing contracts Serves as the counterpart to the movement of account 086.

09760 - Debtors for deferred rents
09761 - Debtors for residual values

c) 36 - Leased fixed assets
Recording, by the lessor, of the fixed assets that constitute the object of financial leasing or are intended for financial leasing operations, in which the lessor intervenes in that capacity.

360 - Leased real estate

3600 - Real estate under financial leasing
Real estate that is in the possession of tenants under a financial leasing regime.

3601 - Real estate temporarily not leased
Records real estate temporarily not leased. This includes assets of this nature that have been returned to the institution at the end of the financial leasing contract, due to the tenant not having exercised the right to acquire the respective property, or before its term due to its termination, as well as those that have been acquired or constructed for future leasing, provided they are not allocated to own services.

3602 - Real estate under construction
Records payments related to the construction, expansion, or major renovations of real estate intended for financial leasing, while their completion has not yet occurred.

It also covers advances made for the purchase of real estate, notably as deposits.

361 - Financial leasing equipment assets

3610 - Equipment assets under financial leasing Equipment assets that are in the possession of tenants under a financial leasing regime.

3611 - Equipment assets temporarily not leased Scope similar to account 3601.

3612 - Equipment assets under construction
Records advances made to suppliers for the supply of equipment assets intended for financial leasing.

d) 39 - Accumulated amortizations

394 - Of leased fixed assets

3940 - Of leased real estate

39400 - Of real estate under financial leasing 39401 - Of real estate temporarily not leased

3941 - Of financial leasing equipment assets

39410 - Of equipment assets under financial leasing 39411 - Of equipment assets temporarily not leased

e) 447 - Financial leasing customers
Records values pending regularization by customers, notably rents already due awaiting settlement.

4470 - Overdue financial leasing rents
Records rents due related to financial leasing operations, awaiting settlement. It is mandatory to transfer due rents to this account within a maximum of 30 days after their due date, where they may remain for a maximum period of 3 months.

4471 - Doubtful collection financial leasing rents Accounts for rents due after the period provided for in account 4470 has elapsed.

4472 - Uncollectible financial leasing rents
Records rents due for which the impossibility of recovery is presumed; this account must be regularized at the end of each year.

4473 - Other amounts receivable

f) 46 - Provisions for overdue financial leasing rents Account representing provisions intended to cover losses resulting from the non-recovery of overdue rents. It is broken down into provisions for overdue rents, doubtful collection, and uncollectible rents.

g) 5435 - Suppliers of goods and services for financial leasing Records the credit obtained by the lessor from suppliers of goods and services intended for financial leasing.

h) 5582 - Suppliers of goods and services for financial leasing Scope similar to account 5435.

i) 637 - Of financial leasing rents

j) 653 - Of financial leasing rents

k) 751 - Extraordinary gains of the year

7512 - Gains on the sale of leased fixed assets Records gains obtained on the sale of financial leasing assets.

7513 - Other extraordinary financial leasing gains

7524 - Losses on the sale of leased fixed assets Records losses suffered on the sale of financial leasing assets.

7525 - Other extraordinary financial leasing losses

7532 - Recovery of uncollectible financial leasing rents 7533 - Other financial leasing gains attributable to previous years 7543 - Uncollectible financial leasing rents covered by provisions 7544 - Other financial leasing losses attributable to previous years 7555 - Provisions for overdue financial leasing rents 7556 - Provisions for deferred financial leasing rents

l) 764 - For overdue financial leasing rents

m) 874 - Of leased fixed assets

8741 - Of leased real estate

87410 - Of real estate under financial leasing 87411 - Of real estate temporarily not leased

8742 - Of financial leasing equipment assets

87420 - Of equipment assets under financial leasing 87421 - Of equipment assets temporarily not leased

n) 885 - For overdue financial leasing rents

o) 96 - Financial leasing rents
Records the value of monetary installments received from tenants as remuneration for the use of leased assets, corresponding to the period elapsed in the current year.

2.2. The recording of due rents (principal and interest) related to financial leasing operations shall be carried out in the manner set out in Circular Letter No. 5/94 of 20 July from the Banking Supervision Department of the Bank of Mozambique, considering that the market value of the leased asset may be assimilated to a real guarantee.

Maputo, 28 December 1995
THE GOVERNOR
Adriano Afonso Maleiane