Ownership Separated from User
The essence of a lease financing contract is that during the lease tenure, ownership of the assets vests with the lessor and its use is allowed to the lessor and its use is allowed to the lessee. On the expiry of the lease tenure, the asset revert to the lessor.
Term of Lease
The term of lease is the period for which the agreement of lease remain to operation. Every lease should have a definite period, otherwise it will be legally in operating. The lease period may sometimes stretch over the entire economic life of the asset (i.e, financial lessor) or a period shorter than the useful life of the asset (i.e. operating lease). The lease may be perpetual, that is, with an option at the end of lease period to renew the lease for the future specific period.