52 ALRAQABA . ISSUE 18 Overview of Financial Leasing Definition of Finance Leasing Financial Leasing is used as a financing method in the major branches of the private sector, which depend on this means of financing to provide for their needs. Examples of these private sector fields include contracting, building, and construction, in addition to the various fields of medical treatment, oil, transportation, industry, and agriculture. Typically, companies specializing in these fields require huge machinery, production equipment, and advanced technology in order to operate. However, it may be difficult for the private sector to own a large capital that would cover all these needs. Thus, this leasing system comes to hand as the solution for the companies to obtain their needs of advanced technological equipment by leasing the needed equipment instead of purchasing them. Subsequently, leasing would then contribute to the illumination of the lack of liquidity problem that companies may face. Theme 1: What is Financial Leasing? Financial Leasing is established based on the need of a commercial or industrial project for movable or immovable assets that the project serves or is founded upon. However, the project may be financially unable to own these assets, or the need for such assets may be only temporary for a specific purpose. Thus, a second party would be engaged, i.e., a financial institution, to finance the acquisition of the needed assets by means of leasing. The lessee pays the rent by operating the movable or immovable assets within the project. At the end of the lease, the lessee may opt to return the leased asset to the Jinan Ahmad Al-Failakawi Associate Auditor at the Supplementary Bodies of Social and Public Affairs Audit Department Thesis
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