Lease diffrentiation

finance lease is that type of lease in which ownership is transferred from lessor to lessee at the end while operating lease ownership is not transferred i.e, basically on rental basis

particularly there is no funda but accordinf to AS-19 if it satisfies the given conditions it is said to be finance lease:-

- if agreement provide that ownership is transferred at the end

-PV of MLP= fair value of asset

-lease asset has economic life

-lease asset is of specialised nature i.e, only lessee can use it

-lessee has option to purchase the asset at a price lower than fair value