Leasing

Topics: Lease, Renting, Leasing Pages: 3 (694 words) Published: June 24, 2013
Leasing
Leasing is a process by which a person rent property to another person with the rental contract. Lease has the same meaning as rent. Lessor and lessee are the main character in the process of leasing. Lessor

Lessor is the owner of the property and assets. The lessor lease their assets or property under a agreement and contract to the lessee. The lessor will receive the payment from lessee. They are also called as ‘landlord’ in the category of property and real estate market. Lessee

Lessee is the party who lease assets or property from lessor. They need to pay a certain amount to the lessor before obtain the assets or property. They can use the property without paying a big amount of cash and extra debts. Besides that, they are required to sign an agreement or a contract before they obtain the property. The lessee also called as ‘tenant’. Lease

The contract between the lessor and the lessee is lease. It is a document that contains the agreement that the lessor lend their assets and property to the lessee. There are 2 type of leases, which are operating or general lease and financing or capital lease. An operating lease is a short-term lease agreements, it does not recorded in the lessee’s balance sheet. The lessor is responsible for the service and maintenance of the assets and property. Besides that, the lessor is usually lease their assets and property to various lessee in the economic life. For examples, the lease of real estate and manufacturing equipment. For the financing lease, it is a long-term lease agreement and recorded in the lessee’s balance sheet. Financing lease is usually responsible more assets and property in economic life. Advantages of leasing

* Tax benefit
The total lease rental counts as a tax-deductible expenses. The corporate income usually deducted the lease payment. * 100% financing
The lease cover all the equipment costs, which mean no money charges and down payment require. Since there is no requirement of money...
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