In a discounting scenario, who owns the equipment?

In a discounting scenario, who owns the equipment?

• A. Lessee
• B. Manufacturer
• C. Lessor
• D. Financier

Answer: (C)

In a discounting arrangement, ownership of the equipment remains with the lessor. The lessor funds the purchase (often by buying the equipment or its title) and then leases it to the lessee. The lessee gains the right to use the equipment and makes rental payments, but does not own the asset during the lease term. Ownership staying with the lessor provides the security interest for the lease and explains why the asset is discounted against the lease payments. Depending on the lease terms, ownership may transfer later only if there’s a purchase option or a different lease type, but in a standard discounting structure the lessor retains ownership.

In a discounting arrangement, ownership of the equipment remains with the lessor. The lessor funds the purchase (often by buying the equipment or its title) and then leases it to the lessee. The lessee gains the right to use the equipment and makes rental payments, but does not own the asset during the lease term. Ownership staying with the lessor provides the security interest for the lease and explains why the asset is discounted against the lease payments. Depending on the lease terms, ownership may transfer later only if there’s a purchase option or a different lease type, but in a standard discounting structure the lessor retains ownership.