Difference b/w operating and financial lease
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financial lease is a lease in which the risk and rewards are transformed to lessee with the tranfer of the assent and
operating lease in which the risks and reward are not transferred to the lessee with the trasfer of the asset.
l hope it help ☺
operating lease in which the risks and reward are not transferred to the lessee with the trasfer of the asset.
l hope it help ☺
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these are the basic differences between operating and financial leases
Operating Lease Financial Lease
Ownership lies with the lessor Lessee has an option of transfer of ownership after lease period
All the risks and rewards of the All the risks and rewards of the
property goes to the lessor property goes to the lessee
Expenses are borne by the lessor Expenses are borne by the lessee
There are no running costs to Expensive running costs to the
lessee lessee
Tax depreciation can be claimed by Tax depreciation can be claimed by
lessee lessee
Operating Lease Financial Lease
Ownership lies with the lessor Lessee has an option of transfer of ownership after lease period
All the risks and rewards of the All the risks and rewards of the
property goes to the lessor property goes to the lessee
Expenses are borne by the lessor Expenses are borne by the lessee
There are no running costs to Expensive running costs to the
lessee lessee
Tax depreciation can be claimed by Tax depreciation can be claimed by
lessee lessee
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