Finance and accounting
Residual Value
Residual value is the estimated worth of leased equipment at the end of the term, and it determines who carries the end-of-lease risk.
Residual value is the estimated worth of a leased asset at the end of the lease term.
Under a finance lease, the lessee may carry the residual value risk, which can mean a balloon payment or responsibility for disposal if the device market value falls below the contracted residual.
Under an operating lease, the structure used for most managed-print arrangements, the lessor keeps the residual value risk and the lessee simply returns the device at the end with no exposure to its market value.
Understanding residual value helps a business compare finance lease proposals, which can look cheaper monthly but carry a residual obligation, against operating lease proposals where the monthly rate already includes that risk. Confirm the residual value treatment in any lease document with your accountant or legal adviser.
In short
- The estimated end-of-term value of the equipment.
- On a finance lease the risk is often yours.
- On an operating lease the lessor keeps that risk.
Compare a Toshiba lease for your office
Lease from $189/month ex GST on a 36 to 60 month term, maintenance and toner included. Quote in under 2 minutes.
See it on a lease page
Related terms
- Finance LeaseA finance lease is an agreement under which a business effectively finances the purchase of equipment and carries most of the risks of ownership.
- Operating LeaseAn operating lease lets a business use equipment such as a printer for a fixed term and return it at the end, without taking ownership.
- OpEx vs CapExOpEx is the day-to-day cost of running a business. CapEx is one-off spending on owned assets. A printer lease is generally OpEx.
- Lease TermA lease term is the fixed contract period, stated in months, during which you pay to use the equipment.
- GST on Printer LeasesPrinter lease payments attract GST at 10%. Quotes are usually shown ex GST, and GST-registered businesses can generally claim the GST back.
Enquired on Monday and had a printer installed by Friday. Fast, easy, and exactly what we needed.
We have been using Global Document Solutions for about eight years now and would not go anywhere else.
Get your tailored printer lease quote
From $189/month ex GST · 36 to 60 month term · maintenance and genuine toner included.
No obligation · Same business day response Mon to Fri · Your lease never auto-renews without your written sign-off.
Quick form