Finance Guide Center

How will leasing as opposed to buying capital assets improve or weaken a firms financial statements?

How will leasing as opposed to buying capital assets improve or weaken a firms financial statements? Is there a recommended preference for particular industries in reference to the lease or buy decision? Where can I look to find a leased assets lease amount on financial statements?

Public Comments

1. Leasing, or Buying, both has its own advantages. In both the cases, you make use of equipment. Leasing, is preferred when you don't have a capital budget. Buying, is preferred when buying is more economical. Leasing can be done from the revenue budget. Leasing, effect Profit directly.
2. You cannot depreciate a rented asset and you can claim a deduction on the rental as a cost of doing business. A company I used to work for sold their company jet and rented it back from the same company for this reason.