What Is Financing Lease?

Financial leasing refers to the pfer of all risks and rewards related to asset ownership in essence.

Those that meet one or more of the following criteria shall be identified as financing leases:

(1) when the lease term expires, the ownership of the leased assets is pferred to

(two) the lessee has the option to purchase the leased assets, and the purchase price is expected to be much lower than the fair value of the leased assets when exercising the right to choose, so that the tenant will exercise this option at the beginning of the lease.

(three) even if the ownership of the asset is not pferred, the lease period will account for most of the life of the leased asset.

(four) the minimum value of the lease payment of the lessee at the beginning of the lease is almost equivalent to the fair value of the leased asset on the date of the lease; the minimum value of the leasehold receipts at the beginning of the lease is almost the same as the fair value of the leased asset on the date of the lease.

(five) the nature of the leased asset is special, and only if the lessee can make use of it.