A ﬁnancial lease:

Question

A ﬁnancial lease:

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A financial lease is classified as a capital lease by accountants, as it transfers most of the risks and rewards associated with the asset to the lessee. This means that the lessee benefits from the use of the asset and is responsible for its maintenance, insurance, and taxes. The lessor typically only receives the lease payments and doesn't retain any significant risks or benefits associated with the asset. Financial leases are often used for high-value assets with a long useful life, such as buildings, machinery, or vehicles.

A ﬁNancial Lease