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 seases described in the following table, Financial Lease Operating Lease Sale and Leaseback The lesson is responsible for maintenance and can't cancel the fease early. It is also known as a capital lease The lessor maintains and finances the asset. Maintenance costs are built into the lease payments, and the lessee often has the option of canceling the lease early. It is also known as service lesse. A firm arranges to sell a fixed asset (property, plant, or equipment) to another party (often a commercial bank or specialized leasing company) and simultaneously agrees to lease the asset back for a specified period of time at a later date