3. Leases and financial statements A lease is an agreement that allows one party to use another party's property, plant, or equipment. Leases have become an important source for financing fixed assets for businesses and consumers. In a lease agreement, the uses the leased assets, which are owned by the Lease agreements can take several forms depending on the needs of the lessee and lessor. Classify the types of leases described in the following table. Fin cial Lease Operating Lease Sale and Leaseback The lease is fully amortized, and the lessor receives payments equal to the price of the asset and an additional rate of return on the investment. This lease allows the lessee to use the asset but does not give the right to own the asset. Such contracts can be canceled before the agreement expires. The seller of the property, called the lessee, immediately receives the purchase price from the lessor. 0 O