This scenario describes the management of leased assets from the standpoint of the lessee.

Leased assets create special accounting requirements for the lessee, as compared to assets that an enterprise purchases or produces itself. During the term of the lease, under certain conditions, leased assets remain the property of the lessor or manufacturer. They represent, therefore, a special form of rented asset. Such assets are legally and from a tax perspective the responsibility of the lessor, and are not relevant for assessing the value of the fixed assets of the lessee. However, in certain countries, you are nonetheless required to capitalize leased assets, depending on the type of financing involved.

This scenario makes it possible to handle different types of leased assets differently. Depending on the legal terms, the leased assets can be capitalized and depreciated (capital lease method) or they can flow into the P&L as periodic rental expenses (operating lease method).