08-13-2009, 04:35 AM
It is not the Finance Lease.
There is only one condition for the classification of lease given in standards which is reproduced below
"A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership."
In this case it doesnot transfers the risks and rewards incidental to ownership substantialy to the lessee.
There is only one condition for the classification of lease given in standards which is reproduced below
"A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership."
In this case it doesnot transfers the risks and rewards incidental to ownership substantialy to the lessee.