Which of the following is not a reason for leasing?
A) Leasing provides the lessor with insurance against obsolescence.
B) Leasing can reduce taxable income.
C) Leasing can be a source of off-balance-sheet financing, provided certain conditions are met.
D) A company can obtain financing easier because the leasing company retains title to the asset.

Question

Quizplus · Accepted Answer

Leasing does not provide the lessor with insurance against obsolescence; instead, it is the lessee who benefits from avoiding obsolescence risk, as they do not own the asset.

Which of the Following Is Not a Reason for Leasing