The Finance Leasing Act (72 (I) /2016 (the ”law”) came into force on 28 April 2016 in Cyprus, with another directive on financial rentals (the ”directive”) of the Central Bank of Cyprus, on 17 February 2017. The objective of this legislation is to create a regulatory and prudential framework for the operation of financial leasing companies that provide leasing services to the public. The tenant is responsible for all damage and damage to the property during the term of the contract. The owner is not responsible for quality defects. Financial leasing is another financing option where a licensed leasing company (the ”lessor”) buys, on behalf of its client (the ”tenant”), an investment in the name of its client (the ”tenant”) against a series of contractual payments, which generally contain an interest rate element. The lessor retains ownership of the asset while the underwriter benefits from the use of the asset during the term of the lease, usually accompanied by an option to purchase the asset at the end of the contract. The tenant bears all costs and risks associated with the use of the leased asset. Leasing contracts are legal and binding contracts that set the terms of leases in real estate and real estate and private property. These contracts define each party`s obligation to respect and maintain the agreement and are enforceable by each party. A rental agreement for residential real estate includes, for example, the address of the property, the responsibilities of the landlord and the responsibilities of the tenant, such as the amount of rent, a necessary deposit, the date of the expiry of the rent, the consequences for the breach of contract, the duration of the lease, the guidelines on pets and all other essential information.
According to AASB 117, paragraph 4, a lease is a contract under which the lessor transfers the right to use an asset for an agreed period of time to the underwriter for a payment or a certain number of payments.  In the case of a financing lease, you will be liable for damage to the asset, so it is important to ensure that you have an insurance policy for the assets or assets involved, covering any potential damage that may occur during the lease. The equipment lease must contain guidelines for the termination of the contract. A company may decide to terminate the contract halfway, either because it finds an alternative, or because the equipment is defective or obsolete. Some leasing companies may impose penalties if the actual penalty interest was not disclosed in the initial phase. Technology-based devices are rapidly becoming obsolete, and a company may want to quickly find alternatives to compete. For companies that are not affected by these changes, the ability to finance assets while remaining off the balance sheet may be the determining factor in the choice between leasing and leasing. As under the repealed law, the tenant is the owner of the rented property. It uses the goods in accordance with the agreement and carefully and can benefit from quality. The rented property must be insured and the tenant must pay the premiums. Unlike the repealed law, Law 6361 does not fix the insurer; it is regulated under the agreement. An operational lease is usually located where assets have a residual value such as aircraft, vehicles and construction equipment and machinery.
The client receives the use of the asset during the agreed term of the contract in exchange for the payment of the rent. These payments do not cover the total cost of the asset, as is the case with a financing lease. IAS 17 is now converted to IFRS 16 as a joint project with the U.S. Leasing Accounting Standard. The standard was published in 2016, with companies expected to implement it by 2019 or earlier. The criteria for classifying as a financing lease are similar to those mentioned above, but an assessment is required – compliance with a requirement may not be sufficient. In recent years, the number of leasing companies in the United States has steadily increased to meet the growing demand for