What does a lease convey to the lessee?

A lease primarily conveys the right to use an asset for a specified period. This arrangement allows the lessee to utilize the asset—such as equipment, property, or vehicles—without transferring ownership. The lease defines the duration of the usage rights, outlining the terms under which the lessee can operate the asset and any limitations that may apply during the lease term.

This use right is central to lease agreements, which are structured to give the lessee access to the benefits of the asset while the lessor maintains ownership. Understanding this concept is crucial in corporate reporting as it impacts financial statements, lease liabilities, and asset valuations. This clarity helps in recognizing how leases are classified and reported under relevant accounting standards, such as IFRS 16 or ASC 842.