The 5 Lease Classification Tests
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Course Description
A lease is a contractual arrangement calling for the lessee to pay the lessor for use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment is also leased. Broadly put, a lease agreement is a contract between two parties, the lessor and the lessee.A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—owned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor, the property owner or landlord, regular payments for a specified period in exchange.
What are the three types of leases?
The three most common types of leases are gross leases, net leases, and modified gross leases.
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