Describe the difference between how a lessor would report the cash flows associated with an operating lease and a finance lease.
Explain the difference between the ways a lessor will report the cash flows associated with an operating lease and finance lease.
Lease: Lease is a contractual agreement whereby the right to use an asset for a particular period of time is provided by the owner of the asset to the user of the asset. The owner, who possesses the asset, is termed as ‘Lessor’ and user, to whom the right is transferred to, is termed as ‘Lessee’.
Finance leases: In finance lease all the ownership risks and responsibilities are transferred from the lessor to the lessee...
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