A liability is an obligation to pay funds in the future (for example debt with a bank). A long term lease is also an obligation to pay funds in the future and so, some argue, should be shown as an liability also. Otherwise when looking at the balance sheet what is essentially a commitment to pay funds in the future is not recorded anywhere.
In terms of the asset itself it is being held long term and so the organisation has the rights and benefits of that asset for a long period of time, just as it would if it had bought it outright. If the organisation uses the asset in this way it should, some would argue, be recorded as an asset on the balance sheet.
In terms of the asset itself it is being held long term and so the organisation has the rights and benefits of that asset for a long period of time, just as it would if it had bought it outright. If the organisation uses the asset in this way it should, some would argue, be recorded as an asset on the balance sheet.