Finance Leasing Manual - FLM1.01

Introduction to leasing?

A lease is an agreement whereby one person (the lessor) hires an asset to another (the lessee) for a rent. Leasing can cover anything from the hire of a car or a power tool for a day to the hire of a fleet of jumbo jets or the hire of an office block in Canary Wharf for 25 years. Accountants divide leases into two kinds:

• finance leases; and

• the rest, which are called operating leases.