A lease is a legally binding agreement between two parties: the lessor, who owns an asset, and the lessee, who pays the lessor for the right to use the asset for a specific period. For example, a business may lease office equipment like printers or copiers to avoid the upfront costs of purchasing them outright. Leases can be tailored to the needs of both parties, including terms regarding how the asset should be used, its maintenance, and what happens at the end of the lease period. Leases can also be structured in different ways, including operating leases or finance leases, each having distinct implications on accounting and financial reporting.