What is the bailment provision's definition according to Section 148? Question 9Answer a. What does an operational lease entail, in contrast to a finance lease? Question 10Answer a. Transferring the entire asset ownership b. Everything but transferring most of the risks and rewards of ownership c. A lease beyond the asset's economic life d. Only a short-term agreement
The bailment provision under Section 148 typically refers to the legal relationship in which the owner of a tangible personal property (the bailor) temporarily transfers possession of the property to another party (the bailee) for a specific purpose, with the understanding that the property will be returned to the bailor after the purpose has been fulfilled. The bailee is responsible for taking care of the property during the bailment period.
An operational lease entails:
b. Everything but transferring most of the risks and rewards of ownership.
In contrast, a finance lease typically involves transferring most of the risks and rewards associated with ownership of the asset to the lessee, often leading to the lessee having the option to purchase the asset at the end of the lease term.