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Leasing_Slides - Leasing:Basics specificproperty...

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The lease is a contractual agreement  between the  lessor  and the  lessee .   The lease gives the lessee the right to use  specific property. The lease specifies the duration of the lease  and rental payments. The obligations for taxes, insurance, and  maintenance may be assumed by the lessor  or the lessee. Leasing: Basics Leasing: Basics
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1. Leases may not require any  money down . 2. Lease payments are often fixed. 3. Leases reduce the risk of  obsolescence  to  the lessee. 4. Leases may contain less restrictive  covenants than other types of lending  arrangements. 5. Leases may be a  less costly  means of  financing. 6. Certain leases may not add to existing debt  on the  balance sheet Advantages of Leasing Advantages of Leasing
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According to the FASB: a lease transferring substantially all of the  benefits and risks of ownership should be  capitalized . Transfer of ownership can be assumed only  if there is a high degree of performance to  the transfer, that is, the lease is  non- cancelable .
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