Effectively there are two ways of \u201cowning\u201d an asset \u2013 leasing it or buying it. Yes, leasing refers to renting it and actually buying the asset means you can get a hold of the factual ownership, however, most importantly, with both forms you can use the asset and that\u2019s what we\u2019re on about at the moment.\u00a0<\/p>\n
It\u2019s the decision you have to make however \u2013 to lease or to buy the asset. Each form has its pros and cons as it is, so most importantly you must check which method makes the most sense to you. First things first, think about the cost \u2013 renting means a regular cash outflow whilst buying means a one off investment deal resulting in more cash needed on spot. For the income statement there\u2019s little to no effect (presuming the depreciation equals more or less with the rental charge), however for the cash flow the impact is evidently there.<\/p>\n
Secondly consider the hassle \u2013 depending on the asset type, the company leasing the asset to you can cover the insurances and maintenance. Also, with leases you may still keep the right to return the asset after the rental term. When you buy the asset to yourself, it\u2019s all your responsibility (including recycling or getting rid of the asset after it\u2019s not needed).<\/p>\n
Obviously there are other things (more asset specific) to be considered, so my suggestion to you is to just lay out both the pros and cons for each form of getting a hold of the asset and make your decision based from that.<\/p>\n","protected":false},"excerpt":{"rendered":"
Effectively there are two ways of \u201cowning\u201d an asset \u2013 leasing it or buying it. Yes, leasing refers to renting it and actually buying the asset means you can get a hold of the factual ownership, however, most importantly, with both forms you can use the asset and that\u2019s what we\u2019re on about at the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[25,67],"tags":[],"class_list":["post-4074","post","type-post","status-publish","format-standard","hentry","category-1-basic-accounting","category-1-15-operating-lease"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4074","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4074"}],"version-history":[{"count":2,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4074\/revisions"}],"predecessor-version":[{"id":4078,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4074\/revisions\/4078"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4074"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}