Difference Finance Lease
A finance lease, also known as a capital lease, is a type of lease agreement where the lessee (the user of the asset) essentially assumes the risks and rewards of ownership, even though the lessor (the owner of the asset) retains legal title. This contrasts sharply with an operating lease, where the lessor retains most of the risks and rewards. Understanding the differences between the two is crucial for businesses making decisions about acquiring assets.