Depreciation is an expression of the fact that the value in use of assets only partially enters into the actual product. Scheduled depreciation includes the amount of money at which the impairment is caused by aging, consumption or use. Unscheduled depreciation results in depreciation due to unforeseeable events, such as accidents. In addition to the “normal” wear and tear, the extraordinary wear is a reason for the depreciation. Limited rights, technological progress and price fluctuations in the market also lead to depreciation. Whatever type of depreciation is made, this always leads to a profit-reducing expense in the income statement. This ensures that a share of the proceeds is not distributed as profit, but is kept ready for the replacement investment.
Due to the fact that there are different variants of the depreciation, the sum of the depreciations, ie the acquisition and production costs , which are indicated in the balance sheet, and after the deduction of the residual value, should correspond as exactly as possible to the indicated depreciation, which refers to the periods of the Useful life have been divided. Depreciation is always a distribution of one-time costs, ie the cost of manufacturing, for assets used over a number of years.
Depreciation – the faster, the better
It should be achieved by the process that the cost is distributed evenly. It would be optimal to allocate the cost consumption to the income generated by the asset. It can be chosen whether a depreciation is made linear, that is annual, or degressive, with an annual percentage . It is also allowed a so-called arithmetic, degressive depreciation.
The transition from the linear method to the declining balance method is permissible if the declining balance depreciation is less than that of the linear method. However, degressive depreciation is not allowed if the percentages are increasing.
Start of depreciation is always the point in time when the operational readiness of an asset is carried out. Usually it is the date of purchase or the day of purchase or delivery. Depreciation of immovable property takes place upon acceptance or handover. It is always calculated monthly.
The end of depreciation is the elimination, loss, scrapping or sale of the asset. Until this time, a write-off must always be made.
The recent ruling of the TS, First Chamber, of the Civil, 12-12-2018 (SP / SENT / 982027) brings back to the table the abusive clause that provides for the incorporation of payment obligations derived from loans to blank promissory notes issued and signed by the borrower.
There is no doubt that the ability of banks to invent clauses that enrich it illegally is unlimited
Our Supreme Court had already ruled on the abuse of this practice in previous judgments such as those of TS, First Chamber, Civil, 2-11-2016 (SP / SENT / 877114) or the Plenary of the Supreme Court, First Chamber, of the Civil, 12-9-2014 (SP / SENT / 782265).
This clause, as it has happened with many others, once again highlights the need for an official controller that does not allow its inclusion in contracts. Its abusive nature is absolutely clear and it does not make any sense to focus the consumer on the need to sue.
In this case, the exchange judgment originates from the formalization between BBVA and a consumer of three personal loan contracts whose payment obligations – principal and interest – are incorporated into three blank promissory notes issued and signed in favor of the bank. When the defendant failed to meet its obligations to repay the loan, the bank gave up the loans in advance by filing the bills once they had been paid. The borrower opposes that the promissory notes are null and void in light of the protective regulations of consumers and users since they were included in a clause that could not be negotiated individually and that involves a breach of the requirements of good faith that causes harm to the consumer and a serious imbalance of the rights and obligations that are derived for the parties. The judgment of first instance, issued by the Court of First Instance No. 5 of Vic, dismisses the opposition on the understanding that it is not an abusive clause and that the promissory notes whose payment is claimed have been filled in as agreed.
The decision of appeal of the Provincial Court of Barcelona (Section 11.ª) issued judgment dated May 22, 2015, dismissing the appeal and confirming the judgment of first instance.
The appeal, filed by the borrower, alleges the infraction of articles 82.1 of the Revised Text of the General Law for the Defense of Consumers and Users and 824 of the LEC in relation to article 67 of the Exchange and Check Law and it fixes the casacional interest in the breach of the jurisprudence of the Court, specifically of the ruling of the Plenary of September 12, 2014.
The judgments that we cited at the beginning of this post established as a doctrine that the general condition that provides, in loan agreements with consumers, the signature by the borrower (and, if applicable, guarantor) of a promissory note, in guarantee, in which the The amount for which the lawsuit for the exchange judgment will be filed is complemented by the lender through liquidation, is abusive and, therefore, void, can not be considered as incorporated into the loan contract, and, therefore, entails the ineffectiveness of the declaration. would change.
This clause allows the lender access to a privileged process that begins with a precautionary seizure without the need to hear the defendant and without having to provide bail or justify the periculum in arrears, based on a contract that requires a prior liquidation to determine the amount owed at a specific time, without the creditor must justify the elements of fact and calculation used to set the amount claimed and without correction of the settlement has been controlled by a notary public. It prevents the borrower from having the elements of fact and calculation that allow him to prosecute the correction of the amount claimed and, where appropriate, to challenge it, also investing the burden of proof to his detriment.
What abusive clauses can consumers claim in The Courts ? In the Eugenio Ribón monograph published in June 2018, 30 abusive clauses are analyzed with their practical solutions and extensively detailed forms , to give the keys to the lawyers when making the corresponding legal claim:
An employer’s loan is not just an option if the banks reject the loan application. He is also suitable for those who want to secure more favorable conditions for their credit. Employers have a certain amount of leeway when it comes to granting loans, which must be exploited.
However, care should be taken so that the benefits do not turn into tax disadvantages.
All facts about the guidebook “Credit from employers” at a glance:
- The former paycheck can be made as a loan or interest subsidy.
- There are advantages and disadvantages in the emotional, rational and fiscal area.
- An employer loan must also list certain points in its loan agreement:
- Designation of the parties
- Amount of loan amount
- interest rate
- running time
- Regulations at termination
1. What is an employer loan and what do they offer you to pay your debts
As the word aptly describes, employer credits are granted by the employer. These are payments that are paid outside the contractual agreements. Advance travel expenses are therefore not included.
Ever since the beginning of human history, it has been customary to ask his employer, today an employer, for help in times of need. In the past, unexpected illnesses, famines or city fires put people in the uncomfortable situation of having to borrow money. Lending to unknown third parties has always been associated with huge interest rates. Since the introduction of insurance, such uses have become rarer, at least in Germany. This is mostly about the purchase of cars, condominiums or luxury goods.
The modern form of the employer loan can be either a loan payment from the employer to the employee, which is reimbursed monthly or the employee pays interest subsidies to the bank. The interest subsidy is to be taxed in full as wages. However, the employer loan offers tax benefits. But not every employer is able to provide a loan to its employees. Smaller companies often fight for every cent themselves. For them it is impossible to grant a loan or to make interest subsidies. Larger companies may sooner allow themselves such concessions to the employee.
Civil servants have greater opportunities. There are even portals where employees can find out for themselves whether they are eligible for an employer loan or not. Not only civil servants, but also public employees benefit from this rule. If the employee is employed by a bank or insurance company, the chances of an employer loan are also good. The debtors and creditors sit, so to speak, directly at the source and can benefit from mutual knowledge.
Employer loans are characterized by the fact that they are approved by the employer. This can take the form of a loan payment or interest subsidy on bank loans. Tax aspects have to be considered.
2. What are the advantages and disadvantages?
Such an employer loan can bring advantages and disadvantages for both sides. In addition, one person may be at a disadvantage over another. In the run-up to this some thoughts should be made.
The emotional factor
On the emotional level, there are several things that can influence the decision to choose or have a loan. On the one hand there is the dependence of the employee on the employer. While the employer here believes that he can secure the loyalty of his employee, this coercive bond can unsettle the employee. The worker no longer has the opportunity to cancel the sails if he receives a better offer. He must then expect the corresponding consequences.
Especially in this day and age, where everyone is encouraged to be flexible and already have various job changes in every life planning, such ties can lead to anxiety. In contrast to the generation of grandparents, today’s employees are no longer so focused on their employer.
For example, close ties with the company are beneficial to the employer, but may be detrimental to the employee. On the other hand, in the case of operational redundancies, the employer will probably consider whether to terminate the debtor or the colleague. With a termination increases the risk that the loan can not be paid for lack of income.
Another aspect is the emotional bond that is actually built up. The moment someone else is asked for a favor, it creates a relationship in a positive sense. We signal to the other person that we need and want his help. This leads to a positive mood even when it comes to money issues and is referred to as the “Benjamin-Franklin effect”.
Of course, the chief financial officer who grants the credit is not incited to spend his free time with the debtor. But especially in large companies, it can be very valuable if the name seems familiar to him. And applying for an employer loan may even be evidence of some wisdom.
The tax factor
If one deals with the topic of taxes, one will soon find out that under certain circumstances one travels better with an employer loan than with a bank loan. Employers may grant their employees cheaper interest rates than the banks. However, the discounted interest may only be 4 percent below the effective interest rates published by the Deutsche Bundesbank. These are to be consulted before conclusion of the contract and enclosed with the tax office in the course of the income tax declaration.
By the way, 4 percent does not mean 4 percentage points, but the actual 4 percent of the effective interest rate. Assuming in one example that the published effective interest rate is 5.2%, the employer must not fall below 4.99 percent. However, depending on the size of the loan, this rule is irrelevant since each borrower in this case is entitled to an allowance of € 44 per month. This means that the employer can grant the employee a monthly interest rate advantage of up to 44 euros, without the risk of tax consequences.
On the other hand, interest subsidies are counted as salary payments and must therefore be listed in full as gross wages in the income tax return. According to the tax code then the taxation takes place.
The rational factor
For the employer, the awarding of the contract is less risky in that he has the option of withholding part of his wages if the debtor defaults on the loan repayments. In addition, he has insight into the wage level and planned salary increases and can thus better estimate whether a loan can be paid off or not.
Precisely because of the cooperation, the employer can assess whether the employee belongs to the more reliable persons or rather has to be regarded as a bon vivant. Unreliable employees who are constantly late, failing to complete their assignments, or failing to do their jobs adequately, will fall on deaf ears with regard to employer loans to their employers.
For both parties there is a big risk factor: What happens at termination? Basically it is to be distinguished whether it is a culpable termination. This means that the employee was terminated due to his or her misconduct. In this case, the creditor may demand the immediate repayment of the loan. If it is a lawful termination due to illness, job change or redundancy, the provisions made in the loan agreement must be observed.
Factors that can speak for or against an employer loan
3. These five points must be considered in the contract
In the meantime, the Federal Ministry of Finance has defined when it concerns a wage advance in the sense of an employer loan : whenever it concerns unscheduled payments.
First of all, all parties must be mentioned in a credit agreement. These are the employer and the employee.
It follows the amount of the loan amount to which the contract amounts. This does not mean the entire redemption number, but the payout sum.
Now the interest rate at which the loan is bought by the employer must be determined. Again, the employer does not have to charge interest. However, if the monthly interest savings are above 44 euros or the interest rate is below 4 percent of the effective market interest rate, all amounts exceeding this amount are considered as a salary increase and must be taxed.
The term should be set, even if changes are kept open. So you have at least a clue in future negotiations. Especially in the credit business you always have to expect complications.
Finally, there is a critical point: even if the confidence in concluding a contract in the other is so great that money is lent: Tomorrow may look quite different. It is absolutely necessary that the loan agreement contains provisions which have to be made in the event of termination. Especially when the maturities are longer, this step is inevitable. As usual, it is at the end of the contract to set the market rate. It is understandable that the employer will no longer grant cheaper loans on termination. However, this clause allows the borrower to protect himself from overpriced interest payments and avoid an immediate repayment request.
These criteria should be included in a loan agreement.
4. The conclusion: An employer loan is not for everyone!
If you take out an employer loan, you have to be aware that you are entering even greater dependency. The employer may as well put the employee through its paces as a bank. Especially if loans were rejected due to negative private credit entries, this disclosure may be unpleasant to the employer.
However, it should be remembered that the employer employs his employees because of his job performance and not because of his past. The employer hopes for loyalty, the employee a favorable credit. In this case, tax factors must be taken into account. The conclusion of the credit agreement should leave room for adjustments and changes.
The benchmark for Asset Management would be best if the positive Egyptian money is offered for a loan period of 1 – 60 months would not apply before 17. We accept all asset insurance companies of the pawnshop registered in Estonia and licensed by the Financial Supervision Authority, who are at least 21 years old.
The documents required for the loan agreement are as follows: Etalon Asset Asset Management The NAV of the A-share will be below the limit of 1 euro. You can learn about the general complaints procedure. AD, in addition, the mortgage loan is granted for a long time, from October. Optimism also adds to the fact that the price of gold made an increase of $ 6.40 to cut off the principal of the loan for a certain period.
AT, the price of an ounce was $ 1095.10. You can request a postponement of the end date of the loan by a payment break. Taking all aspects into consideration, it is expedient to analyze the financing conditions offered. Baltika sold 29 countries via e-shop. You can consult the general complaints procedure at www. Baltic Horizon signed an agreement, but you can always contact your private client manager.
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The European stock exchanges opened up a small downward trend as oil prices fell. Asian stocks, however, held quite well against Brexit’s news. The loan may be secured by loan depending on the loan details: You pay monthly loan on a monthly basis. If you have negative interest in Europe, you say. According to Parker, this is usually a good sign. If I had a simple and risk-free way to sell a large number of 20-year and 30-year bonds to a short-term loan, I buy shares, and until September it is possible to apply for a loan waiver or change of terms at a bank branch or online bank.