Lease

A Lease is an agreement or contract entered into by two parties:

• Lessor - the party that gives the lessee the right to use the asset or property
• Lessee - the party that agrees to pay the lessor for the use of the property or asset

The most common lease agreement in the corporate environment is the lease on a building or facility.  There are two basic kinds of leases:

• Capital Lease - this type of lease involves the use of an asset over most of its useful life, therefore the arrangement is similar to a long term financing agreement.
• Operating Lease - in this type of lease the lessor grants the lessee the use of the property for a limited period of time, while the risks and rewards of ownership continue to reside with the lessor.