Category Accounting for Leases

Implied interest on finance lease

In the finance lease, the interest payments are charged to various years on the basis of different methods. It depends upon the situation and the nature of the lease term. The common methods are: Straight line method In straight line method…

Operating Lease

Any lease other than the finance lease is called operating lease. In this type of lease, the lease rentals are charged to the income statement as an expense over the term of the lease.  Under operating lease, the ownership of the…

Finance Lease

Finance Lease is a type of lease in which all the risks and rewards incidental to the ownership of the asset is transferred to the lessee. It is not necessary that the title of the asset is transferred to the…