Buying or Leasing

[Griet van Vliet]

After the battle of Skor, where she seemed to have mixed results in tying down the First Order's elite squadrons, on the one hand losing Brie to one such squadron, on the other hand, driving one of those squadrons off while shooting down the lead craft. But one of the newcomers to the ORC's starfighter forces, [member="Loske Matson"], once wanted some advice about whether to buy or lease a ship. Now, it would probably be time to inquire about Loske's cash flows and liabilities since these are factors she would need to take into account. And she could be, in fact, doing that sort of stuff for her now that the worst period of a yearly cycle at an accounting firm has passed, that of the tax season. Where external auditors as well as fiscalists would work nearly round-the-clock to get the financial statements and tax filings done, and one knew that, on a planet like Akarui, tax seasons seemed to be concentrated within the first four months, and the accountants working taxation, and to a lesser extent, external audit, could spend the rest of the year doing more of an advising role. And with much better work hours to boot. When Loske arrived at the new Skor office, temporarily leased for a one-year period until the office building would be completed on a plot whose old building was destroyed, Griet would meet with her in person.

"Welcome to VPN, Loske. What bring you to us today?"

 

[Loske Treicolt]

"Thanks for meeting with me... Master...van Vliet." To be honest, in this context, the flygirl wasn't sure how to best address [member="Griet van Vliet"]. Was there some sort of accountant prefix? She was sure the woman would correct her in due course. Her hand extended for a pleasant shake in salutations.

"To be honest, used to fly with Rogue Squadron --" that was an understatement; she'd been part of the first batch of recruits and the first lieutenant for them. "I'm looking to move out from an X-Wing, and make a purchase on something larger and more custom made if possible.

Thought I should check the best move with you on this."

Her salary over the past few years, prizes from random races, and her one-time contract with G.U.I.D.E was sitting comfortably in her bank account, burning a hole.

 

[Griet van Vliet]

"First, let's review what you need out of a ship: that will determine the cost of it all. Now, I'm sure you can find a shipyard willing to build a ship to your specifications and take good care of whatever comes out of it. One more thing: used ships tend to require some refits if you think it's worth buying a used ship"

There was no prefix specific to accountants. Yes, Griet trusted [member="Loske Matson"] to know what she needed, and how these needs would be fulfilled, just that her expertise laid in paying for the ship and how to take care of one's finances once the ship is under the owner's possession. She knew that often, the buzz came from the use of the ship, regardless of what revenue it would bring in to its owner. Or what expenses they can cut into. Yes, to most spacers, their ships were mobile homes to them. Just that BoSS fees (i.e. registration) are typically included into a starship's cost. But since most people outside of business or government used cash accounting, it was no use talking about depreciation even though a starship was, in fact, depreciable property: depreciation is used in accrual accounting. What counted to a new ship owner was the weapons system cost, while the flyaway cost was of more use to a shipyard. They both had an idea of the upkeep, and fuel as well as life support supplies (for light freighters, maintenance typically meant doubling the sum of the previous two items to be safe, although sometimes it could cover depreciation) and that upkeep was hull-dependent.

"Then I may wish to know whether you have significant liabilities, i.e. debt, and also if you intend to use the ship for earning revenue; I'll see if it's feasible or not"

 

[Loske Treicolt]

"It needs to be fast and agile." She gestured out some movements, as she took a seat. "I'm used to the maneuverability of an X-Wing, so anything with a likeness to that. Ideally, it has a living area too - to support life in the vacuum for a month or two at a time. I've been thinking corvette-sized

Also, call me fancy, but the more intimate the Ship and I can be -- I'm talking I move my arm, and its canons move at the same time, that would be ideal." She reached into her jacket's inner pocket, holding her datapad outward in in her palm. A blue projection came to life in front of them, rotating. The blueprints were somewhat scarce and unfinished, but they would better communicate the structure to [member="Griet van Vliet"] than the pilot could.

"I'd be open to picking up a few contracts here and there with it. I could earn revenue with this, very willingly.

No outstanding debts in my name."

 

[Griet van Vliet]

"Light freighters would pretty much fit the bill: it's precisely what people whose flying needs comprise maneuverability and living space own"

Generally excise duty was charged at the destination, assuming one wasn't smuggling. Now, upon seeing the design, as well as the cockpit stuff that [member="Loske Matson"] described, she could make a quick estimate as to how much it costs. Yet it was all too clear to Griet that Loske was in it for the long haul, so she added the price of all the equipment Loske asked for, and then entered the numbers, that is, the implicit interest rate, assuming there was no guaranteed residual value at the end of the lease. Which is common when one talks about capital leases, even though she knew than leasing a starship for 1 year would instead be an operating lease. since a lease longer than a year would have to be capitalized, regardless of whether or not the present value of the obligations under lease were below 90% of the fair value at inception, or the lease term was shorter than 75% of the leased asset's lifespan, assuming the lessor follows IFRS. Plus few insurers would even accept to insure such a heavy user as Loske would become; the risks would be far too high. Now, most ORC planets only charge registration fees when a ship changes hands, and depreciation is simply amortizing the purchase cost of the ship over its lifepan, as it is used, the only major fixed cost left is the rent or financing if applicable.

"So you want a cockpit console where you can have one arm for controlling a turret, and the other for controlling the ship's motion. That sort of stuff typically comes at a premium, ca. 10-15k, and the bill will come out to about 250-300k total. Typical implicit interest rates for long-term starship leases would be the financing rates offered by the shipyards. Now, speaking of leases, typical lease lengths are 1, 3, 5 and 10 years. For a ship that size, it's about 3-4k/month for rent or financing, and the upkeep is anywhere between half and two-thirds of the rent for the average owner, but you seem poised to become a heavy user so the upkeep could, in fact, become higher than the rent. If we operate under the assumption that you could pay the whole thing up front, it's still anywhere between 2-7k/month for upkeep"

 

[Loske Treicolt]

"Oh I hadn't thought about multiple use for the augmented extensions.." Loske commented thoughtfully, when [member="Griet van Vliet"] intiated the reciting of features back to her, to validate the request.

It was helpful to hear the numbers broken down, and the girl leaned back in her seat, folding her arms across her stomach and cradling her chin between her thumb and pointer finger for thought. An audible hmmmm escaped her diaphragm, to articulate she was considering the options. The cash was not a problem; Loske's salary was considerable -- on the baseline requirement that she was being paid to risk her life each time she slid into a cockpit.

"I'd rather pay it all off, than have any sort of debt lingering around." She announced after a handful of moments. "Is there one shipyard over another that you'd recommend? I'm assuming a more qualified engineer could keep things on the lower end of the cost spectrum for better it's built."

 

[Griet van Vliet]

"I understand virtually every shipyard that actually sell light freighters in any sort of serial production will be able to do so, but these days there seems to be lots of shipyards out there in different regions. My only real recommendations for shipyards would be made based on where your flying activities will be concentrated. It will make major maintenance easier if refits or recall notices are issued on some components"

Now leasing was completely out of the question, and financing was no longer an issue. There would only be operating and Loske seemed to be based out of a world that permitted cash-based accounting for unincorporated business taxation. Then again, Talz were very adamant about using accrual accounting for taxation of active business income, even for unincorporateds, she thought, while pondering [member="Loske Matson"]'s question. Incom and Ringo were major ORC Navy suppliers, SoroSuub as well, so these were definitely valid considerations, much like Ne-Cal Engineering, and also Jast Shipyards, Aurora Industries, Vanir Technologies. Even MandalMotors if she was comfortable around Mandos. However, she wasn't sure about CEC, KDY or even Rendili StarDrive unless Loske flew in the Core or the Colonies a lot. By now, however, it was clear to her that the client had to be comfortable with whatever shipyard she was to pick, for a spacer that earned revenue as an unincorporated business by flying high-risk missions could have to go back to the yard for repairs on a regular basis.

"With that said, where do you intend to fly most often in the galaxy? Outer Rim/Wild Space? Tingel Arm? Core/Colonies? I'm sure there are qualified engineers in each region, but it's about minimizing deadweight time when the major maintenance happens"