Misconception · MIS:lease-receivable-and-net-investment-are-always-equal

Mistaken idea “Lease receivable and net investment are always equal”

Mistaken reasoning: This mistake omits the unguaranteed residual asset and direct financing deferred profit.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

Net investment adds the unguaranteed residual asset and, for direct financing, nets deferred selling profit. Keep the components visible.

Where to watch

When this mistake may appear

  • A lessor schedule discounts fixed payments.
Check your work

Your work may contain this mistake if:

  • Label the payment PV as net investment without a residual or deferred-profit bridge.