Financial lease

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....nts are calculated to cover the full cost together with interest charges. It is thus a disguised way of purchasing the asset with the help of a loan. SSAP 23 required that assets held under a finance lease be treated on the balance sheet in the same way, as if they had been purchased and a loan had been taken out to enable this." (emphasis supplied) In Lease Financing & Hire Purchase by Dr. J.C. ....

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....is not interested in the assets. This is the reason that financial lease is known as full payout lease where contract is irrevocable for the primary lease period and the rentals payable during which period are supposed to be adequate to recover the total investment in the asset made by the lessor."  According to Lease Financing & Hire Purchase by Vinod Kothari (Second Edition, 1986, at pp. 6....

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....iod. The features of the financial lease, according to the learned author are as under : 1.The asset is use-specific and is selected for the lessee specifically. Usually, the lessee is allowed to select it himself. 2.The risks and rewards incident to ownership are passed on to the lessee. The lessor only remains the legal owner of the asset. 3.Therefore, the lessee bears the risk of obsole....