This Section examines the conceptual, taxation, accounting and evaluation framework of hire finance. Historically, hire purchase finance has been associated with financing of vehicles for road transport operators. It has emerged, in recent years as a source of equipment financing and an alternative to lease financing. We first explain the salient features basics of higher purchase transactions followed by the taxation and accounting aspects of such transactions. The evaluation framework of hire purchase transactions, from the viewpoint of the hirer as well as intermediary (finance company), is outlined subsequently.

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