In a Finance Lease, the asset is effectively purchased by the lender (lessor) and rented back to the borrower (lessee) on a fixed term with repayments paid monthly. At the end of this term the lessee has the option to buy the asset from the Lessor. In this case the lessee assumes the risk on the future value of the asset. Repayments may be expensed as per any other business rental but depreciation cannot be claimed as the asset is ‘owned’ by the lessor.