A lease may be a legal agreement by which the owner of a selected asset or lessor allows the lessee or the second party to use the asset for a selected period in exchange for periodic payments to the lessor. These regular payments are referred to as lease rentals. It permits the lessee to use leased assets for a particular period of your time, generally but the asset’s useful life. It can generally be used for leasing equipment for brief terms. A finance lease accounting is a kind of almost like buying an asset via external finance. The lessee possesses the choice to become a permanent owner of the asset at the top of the term of the lease.