What are unexpired interest charges for leases/hire purchases ?
Thank you.
Generally, these are the remaining interest on the lease/HP that hasn't been expensed.
For instance, if you buy a car under a lease, every repayment you make consists of principal and interest components. The unexpired interest charges are merely the remaining interest over the remaining term of the lease that hasn't been written off yet.
i wanted to know if unexpired interest charges are accounted for as assets? i read somewhere that they are normally debited?
Have a chat with your accountant, but you may find that sub a thing could be treated as a asset as it is essentially a future income tax benefit, ie depending on how you accounted for the car some of the interest may be claimable as a deduction against your tax.
Too many variables to give a categoric answer so best to confirm with your accoutant with your specific scenario.
Cheers – EKG
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