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Essay Details:
Essay text:
You will find that a financial lease usually provides that: Periodic
payments be made, Ownership of the equipment reverts to the lessor at the end of
the lease term, The lease is non-cancelable and the lessee has a legal obligation to
continue payments to the end of the term, and The lessee agrees to maintain the
equipment.
Leases that meet specified criteria are classified as finance leases.
Those criteria relate to the transfer of substantially all the risks and
rewards incident to ownership by the lessor, to the lessee [IAS17.3,5-6]
The operating lease, or "maintenance lease," can usually be canceled under
conditions spelled out in the lease agreement...
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