What is a combination lease?

Explanation

A combination lease contains the mixed features of the operating as well as the financial lease.The combined leases generally contain customized terms and conditions to meet the desired obligations of the parties which neither of the two types of leases fully fulfil.For example, if a cancellation clause is provided in the financial lease which is one of the features of the operating leases, this makes the specified lease agreement a combination lease.

Verified Answer

A combination lease is a lease that contains the features of both the financial lease as well as the operating lease and contains customized terms and conditions to fulfil obligations of different parties.