Answer / Kamala Kant

A Financial Lease is a type of lease agreement where the lessee (user) effectively obtains ownership of an asset over the lease term, with minimal residual value at the end. The lessee records the asset and liability on their balance sheet, as they have control and assume risks associated with the asset. In a financial lease, the lessor (owner) transfers most of the benefits and risks to the lessee, and the lease payments are generally structured like an interest-bearing loan.

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