Why Leasing Becomes More and More Preferable for a Company in Indonesia?

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INTERMEDIATE ACCOUNTING 2 PAPER
Why Leasing Becomes More and More Preferable for A Company in Indonesia?
I. Preface
Being in a very high competitive business condition, a company has to be well prepared for every potential business problem. One of the problems is for a company which will do such a business expansion, they need to spend huge amount of money to make some new investments. For instance, they need to have new capital assets to run their new business.
Due to the huge amount of money they have to spend, the company usually does not provide a bundle of cash from their own pocket to get those kinds of new capital assets. To provide the new capital assets needed, the company has some alternative solutions they can choose. Those
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Over the contract period, the agreement can not be cancelled by only one party (noncancellable)
4. Lessee has an option to purchase the leased asset according to the agreed residual value in the inception date
5. Economic risk and maintenance cost are responsibility of lessee
6. Lessor expects to obtain all of the carrying cost of the leased asset back, including the other costs (interest, tax, insurance, maintenance cost, etc)

The advantages and disadvantages of leasing as an alternative of capital source are as follow
The advantages:
1. Full financing : leasing transaction is usually done without any down payment and the financing can be given up to 100%
2. More flexible : leasing is said to be flexible compared to banking loan because the rental payment can be arranged and matched to lessee ability
3. Off balance sheet : activa that is included into leasing category is not listed in the company asset
4. Consideration of technology advance : the company is avoided from the loss due to the fast growth of technology
5. Incerase Debt Capacity
The disadvantages:
1. Force major
It is the cancellation of leasing transaction, for example due to a fire or natural disaster.
2. Default
It is the cancellation of leasing transaction because the lessee is not able to pay the lease payment and other leasing liability so that finance lease contract is over prior the inception date.
3. Economic reason
It means the

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