What is finance lease in SAP EHS-CI - SAP Carbon Impact?

SAP Term: finance lease

• Component: EHS-CI

• Component Name: SAP Carbon Impact

• Description: Lease that transfers all the risks and rewards of ownership to the lessee and is listed as an asset on the balance sheet of the lessee. Leases other than Capital/Financial/Finance leases are Operating leases. Consult an accountant for further details, since definitions of lease types differ between various accepted accounting principles.

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• Key Concepts:
  A finance lease is a type of lease agreement in which the lessee (the user) pays for the use of an asset over a specified period of time. The lessor (the owner) retains ownership of the asset and the lessee pays periodic payments to the lessor. The lessee is responsible for all maintenance and repair costs associated with the asset.
  
  How to use it:
  In SAP Carbon Impact, finance leases are used to track the carbon emissions associated with leased assets. The user can enter the details of the lease agreement, such as the duration, payment schedule, and any additional costs associated with the lease. The user can then track and report on the carbon emissions associated with the leased asset over time.
  
  Tips & Tricks:
  When entering a finance lease into SAP Carbon Impact, it is important to ensure that all details are accurate and up-to-date. This will ensure that accurate carbon emissions data is reported. Additionally, it is important to keep track of any changes to the lease agreement over time, as this may affect the carbon emissions associated with the asset.
  
  Related Information:
  For more information on finance leases and how they are used in SAP Carbon Impact, please refer to SAP’s documentation on finance leases. Additionally, you can find more information on tracking carbon emissions in SAP Carbon Impact in SAP’s documentation on carbon impact management.