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WILL UPVOTE!! PLEASE ANSWER THE FOLLOWING ASAP! EXPLAIN IN TAGALOG DISADVANTAGES OF LEASING Lease expenses - the treatment of lease payments is as expenses rather

WILL UPVOTE!! PLEASE ANSWER THE FOLLOWING ASAP!

EXPLAIN IN TAGALOG DISADVANTAGES OF LEASING Lease expenses - the treatment of lease payments is as expenses rather than as equity payments towards an asset Limited financial benefits - the long-term lease agreement remains a burden on the business as the agreement is locked and the expenses for several years are fixed. in a case when the use of an asset does not serve the requirement after some years, lease payments become a burden. Reduced return for equity holders - given that lease expenses reduce the net income without any appreciation in value, it means limited returns or reduced returns for an equity shareholder. Debt - although a lease doesn't appear on a company's balance sheet, investors still consider long-term leases as debt and adjust their valuation of a business to include leases. Processing and documentation - overall, entering into a lease agreement is a complex process and requires thorough documentation and proper examination of an asset being leased. No ownership - at the end of the leasing period, the lessee doesn't become the asset owner though quite a good sum of payment is being done over the years towards the asset. Maintenance of the asset - the lessee remains responsible for the maintenance and proper operation of the asset being leased. DIFFERENCE BETWEEN LOAN AND LEASE Parties - a) in case of a loan, the entity providing the funds is called the lender and entity obtaining the funds is called the borrower. b) in case of a lease, the entity providing the asset is called the lessor and the entity using the asset is called the lessee. Benefit received by the borrower/lessee - a) in case of a loan, the borrower obtains funds i.e.: actual money. b) in case of a lease, the lessee obtains right to use an asset. Compensation received by the lender/lessor - a) in case of a loan, the lender receives compensation for providing funds in the form of interest. b) in case of a lease, the lessor receives compensation for transferring right to use the asset, in the form of monetary lease payments. Certainty of compensation received by the lender/lessor - a) in case of a loan, the quantum of interest received may or may not be certain depending on whether it is a fixed rate or a floating rate loan. b) in case of lease arrangement, the quantum of lease payment received by the lessor is certain and predetermined.

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