The lessee handles the lessee's financial lease assets by accounting, although it has not legally obtained the ownership of the assets, but according to the principle that substance is more important than form, the financial lease assets should be accounted as assets and the obtained financing should be regarded as liabilities.
The lessor's accounting treatment (1) the confirmation and measurement of lease income. Rental income is the part of the rental amount plus the estimated residual value of the leased assets that exceeds the value of the leased assets in order to obtain profits. It is required to calculate the rental income of each period according to the net rental investment balance and the interest rate contained in the lease, and determine it by arithmetic progression method. (2) Rent is the reasonable profit of the investment that the lessor can recover, which generally includes the purchase cost of the leased assets, the interest expenses during the lease period and the lease gross profit.