"CAPEX can be converted to OPEX i.e. by using leasing services."

The lease must be a fair market value lease, so that title does not pass.
Only then is it  considered OPEX.

If it's a dollar buyout lease, then its a CAPEX lease and must  be
accounted for as CAPEX.

Joe

On Mon, Jan 18, 2021 at 6:46 AM R.S. <[email protected]> wrote:

> W dniu 18.01.2021 o 13:28, Joe Monk pisze:
> > "2. EOM and EOS are important, but IMHO prices are more important. In
> > many cases it is cheaper to replace machine than to buy service contract
> > for existing (old) one. And it is rather cheaper to buy newer model even
> > if new and new-1 are available."
> >
> > The purchase  of hardware is CAPEX. The purchase of a service contract is
> > OPEX. OPEX is an expense and affects income, therefore you do not  have
> to
> > pay income tax on it. CAPEX affects fixed assets and there are taxes to
> be
> > paid on it.
> >
> > There is a point where it is less expensive to replace, say a model with
> > one that is newer (maybe a z13 with  a z16). But in general, it is less
> > expensive to maintain an existing piece of equipment  than to buy a new
> one
> >   (depreciation and all).
>
> CAPEX can be converted to OPEX i.e. by using leasing services. There are
> also other tricks.
> Regarding prices - I do not have to convince anyone, but ...I used to
> buy mainframes and I simply see IBM offerings. Depending on time
> perspective *usually* it is more effective (cheaper) to buy new
> equipment than buy service for existing one. My advice: buying new
> hardware is the best time to think about service for all life of it.
> Extending support after first year tend to be more expensive, especially
> when new machine is available.
>
> --
> Radoslaw Skorupka
> Lodz, Poland
>
>
>
>
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