Accounting for Profit Share Arrangements in Charter Parties

Traditionally charter parties have split into time charters, voyage charters and bareboat charters. There may have been variations on each but essentially they were of these three basic types. Which type the owner entered into would depend upon what his customers wanted and what risk profile he wanted to have – did he want the steady, known income of a time charter or the less certain but potentially more lucrative voyage charters? Increasingly, especially where complex leasing finance structures are involved, we are seeing a number of cases where these traditional boundaries are being blurred, creating risk-sharing charters that contain profitrelated elements. How do the owner and charterer agree on the varying income and then account for it?

This is only an excerpt of Accounting for Profit Share Arrangements in Charter Parties

Content is restricted to subscribers. To continue reading please Log-In or view our subscription options.