Financial lease / Financial leasing

Financial leasing is a leasing arrangement in which the leased asset remains in the tax 's possession for a pre-negotiated fixed period. Financial leasing can be closed or open, depending on whether the lessee takes over the leased asset at the end of the term or it is only an option.

Leasing is a transaction in which the tax and the lessee agree on the use of some asset. The lessor owns or specifically buys the asset to be leased for this reason. And the lessee pays a lease fee for the use of the asset. There are several types of leasing. The difference between each type of lease is primarily what happens to the leased object at the end of the contract. 

One of the most common types of leasing structures is financial leasing. (The other most common is operating lease.)

In the case of financial leasing, the leased asset remains the property of the tax for a specified period of time. During this time, the lessee pays a lease fee and uses the asset. At the end of the term, however, in the case of financial leasing, the asset may become the property of the lessee for free or at a predetermined at residual value. If this has already been stipulated at the beginning of the term, then we are talking about a closed-end financial lease. 

In the case of open-end lease contracts, the term is also predetermined. However, at the end of the term, the lessee can decide whether to purchase the asset or not. One special case of an open-end lease is the buyer designation scheme, when the lessee can say at the end of the term to whom the tax will sell the asset at the predetermined at residual value. 

Closed-end financial lease is essentially an installment plan with pre-planned risks. However, with an open-end lease, the lessee does not run the risks of the asset 's end-of-life condition.