วิกิพีเดีย.Key Differences Between Hire Purchasing and Leasing
The following are the differences between hire purchasing and leasing:
An arrangement to finance the use of the asset, in which one party pays consideration to the other party in periodical installments is known as Hire Purchasing. Leasing is a business deal in which one party buys the asset and grants the other party to use it, in return for lease rentals.
Leasing is governed by AS – 19 whereas there is no specific Accounting Standard for Hire Purchasing.
Down Payment is must, in Hire Purchasing but not in Leasing.
The duration of leasing is longer than the hire purchasing.
Leasing may cover asset like land and building, plant and machinery etc. Conversely, cars, trucks, tempos, vans, etc are the kind of assets which are sold on hire purchasing.
The installment paid in hire purchasing includes principal amount and interest. In contrast to Leasing, in which the lessee has to pay the cost of using the asset only.
In hire purchasing the ownership is transferred to the hirer only if he pays all the outstanding installments. On the other hand, in finance lease the lessee gets the option to buy the asset at the end of the term by paying a nominal amount, but in operating lease there is no such option available to the lessee.
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