Which of the following describes the lease term test? If the lease term is 75% or more of the economic life, it is a finance lease. If the asset has an alternative use during the lease term, it is a finance lease. If there is a bargain purchase option during the lease term, it is a finance lease. If the lease term is 90% or more of the economic life, it is a finance lease.

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Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.