Leasing is the term used to describe a contractual agreement that allows companies to utilize and manage an asset without actually having to own it. Financing refers to an agreement in which a financial institution provides the client with the funds necessary to purchase an asset. In this article, know how they are different, their benefits, and which one is better.
In Right of Use, assets now capture specifics of how a lessee gets the authorization to utilize an asset if it's mentioned in a lease during a contract's duration. It does so in a way that makes it easy to understand. In this article, know what it is, how its value is determined, and how it's calculated.
Leasehold improvements can be defined as the changes or modifications done to a property to suit the tenant's requirements before signing the lease. In this article, know how it works, what are its different types, and how its accounting is done.
A finance lease is an agreement in which the lessor allows the lessee to use a particular asset for a fixed term. An operating lease is an agreement in which the lessee is allowed to use an asset with the permission of the lessor for a limited term.
Deferred rent occurs when a contract presents a tenant with free rent settlement for one or more than one rent term. In this article, know what it is, what a deferred expense is, and how it is different from prepaid expenses.
The incremental borrowing rate refers to the interest rate a lessee needs to pay to be able to fund an asset. In this article, know what it is, when to use it in your lease accounting, why you need it, and when you can update it.
A full-service gross lease (FSG) is an agreement where the property owner is responsible for maintenance, renovations, and other service charges of the property. In this article, know what it is, the terms related to it, and its advantages.
A capital lease affects your ledgers whereas an operating lease doesn't. In this article, we compare capital leases vs. operating leases, how they work, and what are the pros of using them.
Lease administration is a continual process of checking whether the lease's key business points and legal information are being adhered to. Learn why it's important, the tasks related to it, and effective ways to manage it.
The lease commencement date refers to the start or beginning date of the lease term. In this article, know the different types of commencement dates, why you should document the date, and how you can implement it.
Lease abstraction aims to simplify complex lease documentation. It is a summarized version of important lease terms, conditions, and relevant lease data derived from the original lease document. Learn what lease abstraction contains and why you need it.
A graduated lease is a type of lease agreement between the parties involved where they agree to an adjustment of monthly payments on a periodic basis. In this article, know what it is, how it works, and who can benefit from it.
