If a lease transfers the residual value of the leased asset to the lessee at the end of the lease term, the lessee has permanent ownership of the leased asset.

Question

Quizplus · Accepted Answer

The transfer of residual value does not necessarily mean permanent ownership unless the lease agreement specifically states that the title of the asset will transfer to the lessee at the end of the lease term.

If a Lease Transfers the Residual Value of the Leased