Question

what are some of the non-tax related advantages of leasing?

what are some of the non-tax related advantages of leasing?

Homework Answers

Answer #1

SOme of the non tax advantage of leasing are:

There is flexibility with the asset. Asset can be replaced for better technology change easily without having to worry about selling the previous asset.
Obsolence also is therefore overcome easily when one can easily replace an asset.
The cash outflow in inital year can be saved and used for other purposes.
Most importantly it provides off balance sheet financing. The company’s obligation to pay the lease, which is a liability, doesn’t reflect on the balance sheet.

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