Leasing and Off Balance Sheet Financing

Leasing is used by companies to finance the acquisition of capital assets, to raise capital from existing assets by using sale/leaseback transactions, and to manage corporate tax positions by transferring the benefits of equipment ownership to investors who more highly value those benefits. This Self-Instructional Guide describes these techniques and discusses the corporate situations that motivate managers to consider leasing as a financial alternative. The benefits of leasing are often determined by the tax and accounting treatement of leases. It explains the different types and typical terms of leases, as well as how to calculate the pricing of leases.