Hi Mike,
I really don't understand GRV. I don't get why in a lease agreement the leasee guarantees a residual value, like whats the need?
Hope to hear from you soon please.
Best Wishes
Ask the Tutor ACCA FR
Guaranteed Residual Value (GRV)
9y ago#1In case, at the end of the lease, the lessor is not able to sell the asset for as much as the anticipated sale price
So the lessor and the lessee will reach an agreement that the lessee will guarantee that at least $XXX will be received by the lessor
It could be a way of agreeing a lower-than-market rate for the lease instalments
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