Accounting Policies: 3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment ("equipment") (Policies)

3 Months Ended

Sep. 30, 2012

3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment ("equipment"):

3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment ("equipment")

3. Information Technology, Medical Technology, Telecommunications Technology, Inventory Management Equipment (“Equipment”)

The Partnership is the lessor of equipment under operating leases with periods that generally will range from 12 to 48 months. In general, associated costs such as repairs and maintenance, insurance and property taxes are paid by the lessee.

Remarketing fees are paid to the leasing companies from which the Partnership purchases leases. These are fees that are earned by the leasing companies when the initial terms of the lease have been met. The General Partner believes that this strategy adds value since it entices the leasing company to remain actively involved with the lessee and encourages potential extensions, remarketing or sale of equipment. This strategy is designed to minimize any conflicts the leasing company may have with a new lessee and may assist in maximizing overall portfolio performance. The remarketing fee is tied into lease performance thresholds and is a factor in the negotiation of the fee. Remarketing fees incurred in connection with lease extensions are accounted for as operating costs. Remarketing fees incurred in connection with the sale of computer equipment are included in the gain or loss calculations. For the nine months ended September 30, 2012 and 2011, the Partnership incurred remarketing fees of approximately $33,000 and 70,000, respectively. For the nine months ended September 30, 2012 and 2011, cash paid for remarketing fees was approximately $34,000 and $31,000, respectively. 

CCC, on behalf of the Partnership and on behalf of other affiliated partnerships, acquires equipment subject to associated debt obligations and lease agreements and allocates a participation in the cost, debt and lease revenue to the various partnerships based on certain risk factors. The Partnership’s share of the cost of the equipment in which it participates with other partnerships at September 30, 2012 was approximately $9,816,000 and is included in the Partnership’s equipment on its balance sheet.  The Partnership’s share of the outstanding debt associated with this equipment at September 30, 2012 was approximately  $533,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at September 30, 2012 was approximately $30,455,000. The total outstanding debt related to the equipment shared by the Partnership at September 30, 2012 was approximately $1,119,000.

The Partnership’s share of the cost of the equipment in which it participates with other partnerships at December 31, 2011 was approximately $9,280,000 and is included in the Partnership’s equipment on its balance sheet.  The Partnership’s share of the outstanding debt associated with this equipment at December 31, 2011 was approximately $351,000 and is included in the Partnership’s notes payable on its balance sheet. The total cost of the equipment shared by the Partnership with other partnerships at December 31, 2011 was approximately $29,772,000. The total outstanding debt related to the equipment shared by the Partnership at December 31, 2011 was approximately $952,000.

The following is a schedule of future minimum rentals on noncancellable operating leases at September 30, 2012:

	Amount
Three months ended December 31, 2012	$	294,000
Year Ended December 31, 2013		870,000
Year Ended December 31, 2014		672,000
Year Ended December 31, 2015		83,000
	$	1,919,000