The Lessor (JIC Leasing) leases an asset it has purchased to the Lessee who periodically pays a rent. During a lease, the Lessee has the right to use the leased asset and the title to such an asset remains with the Lessor who assumes the residual value risk of that asset. At the end of the operating lease, the Lessee’s options include renewal of the asset, purchase of the asset and return of the asset. The term of an operating lease varies.
An asset for lease under an operating lease refers to the engineering machinery, ship, or large machinery and equipment suitable for operating lease.
1.The pressure of one-time investment of equipment funds is alleviated.
2.Advantages of technology advancement as a result of equipment replacement.
3. Rents are tax deductible.
4. Short-term or low-value leased assets are not included in the lessee’s balance sheet.