A Capital Lease, in the USA, is a lease that does not legally constitute a purchase but is recorded as an asset on the lessee's books under certain conditions.
A finance lease transfers substantially all the risks and rewards of ownership of an asset to the lessee. In accounting, it is akin to the lessee owning the asset. This entry describes the implications and guidelines involved in finance leases.
A lease is a contractual agreement in which a lessor grants the lessee the right to use an asset for a specified period in return for specific rental payments. While the lessor retains ownership rights, the lessee gains usage rights.
A financial arrangement where the owner of an asset sells it but retains the right to use it through a lease agreement, effectively raising funds while maintaining the use of the asset.
Understanding the net investment in a lease involves considering the total amount of funds that a lessor has invested in a leased asset. This includes the cost of the asset, received grants, rental payments, taxation implications, residual values, and various interest payments and receipts.
An operating lease is a lease agreement that is not a finance lease, in which the lessor retains significant risks and rewards of ownership.
A sale and leaseback transaction involves the owner of an asset selling it and then immediately leasing it back from the buyer. This allows the original owner to continue using the asset while freeing up capital.
