Hire Purchase Working Paper

The Hire Purchase template allows you to enter the details of your HP agreement/s in order to calculate and keep track of the capital commitments. Here's how to complete it:

Input the details of the hire purchase agreement for each of the relevant assets. There is the option to input details for multiple assets under the same Hire Purchase nominal code.  

Note: Although the 'Asset name' and 'HP provider' fields are not mandatory, these fields pull into the Summary of Hire Purchase template so are beneficial to include.

Asset name: The asset for which a HP agreement was entered into

HP provider: The banking institute/company with whom an agreement was entered into

Date of purchase: Date that the asset was acquired

Purchase price: Value for which the asset was acquired

Less: Initial deposit paid: Deposit paid for the asset upon purchase

Enable Part exchange: Select only if a part exchange was used when acquiring the asset (thus decreasing the initial purchase price)

Interest spreading method: Sum of digits, straight line or fixed rate

Total finance costs including interest: Total financed costs per the HP agreement, including interest

Less: Initial admin fee: Value of the initial admin fee applied to the HP agreement, if relevant

Less: Final admin fee: Value of the final admin fee applied to the HP agreement, if relevant

Charges spread yearly: Total finance costs less initial admin fee less final admin fee (automatically calculated)

Total repayments: Sum of the total financed value and the yearly charges

Date of first payment: This only needs to be completed if the first payment date differs from the purchase date.

Date of last payment: The date of the last period repayment per the HP agreement.

Periodic repayment amount: Enter the value of the period repayment.

Are there any break clauses? Yes or No

Payment frequency: Monthly, quarterly, bi-annually or yearly

Are balances due after 5 years paid by installments?: Yes or No dropdown selection.

Hire length (in months): Automated based on the date of first payment and date of last payment field

Additional information: Any extra details about the HP asset/contract that you would like to be included

Once all of the above details are filled in for the asset specified, it will automatically break down the capital commitments of your hire purchase. The current period (Total reconciliation summary) will appear in a separate box at the top, and also in the full table below in bold. 

How to reconcile if the amounts due within and after 1 year is within the same nominal code:

Select the Total option under Amounts Reconciled To. This will reconcile this template to the Capital C/F amount. 

How to reconcile if the amounts due within and after 1 year is split into two different nominal codes:

Select the Due within 1 year option under Amounts Reconciled To. This will reconcile this template to the amount due within one year.

Use the Summary of Hire Purchase as explained below to reconcile the details for due within 1 year, and due after 1 year amounts.

Summary of Hire Purchase 

This template reconciles the details of all of your hire purchase assets (entered into Hire Purchase template above) to the value of the hire purchase loan nominal account/s, for due within 1 year, and due after 1 year.

The relevant hire purchase loan account nominal account code/s need to be pulled in for each asset/line item using the # functionality. The remainder of the template is automated based on the HP agreement details entered into the previous template.

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