Who is typically considered the lessee in a lease agreement?

In a lease agreement, the lessee is defined as the party that uses the asset and makes lease payments to the lessor, who is the owner of the asset. This relationship creates a contractual obligation where the lessee gains the right to use the asset for a specified period in exchange for payment. Understanding this concept is essential, as it establishes the dynamics of financial reporting in leases.

The lessee typically has the responsibility for making the lease payments as agreed upon in the lease contract, which can impact their financial statements, as leases can be recorded as assets and liabilities depending on the classification (operating vs. finance lease). This classification affects the balance sheet and can significantly influence financial ratios and operational decisions.

The other parties mentioned in the options serve different roles in the leasing framework, but their functions do not define the lessee. The lessor is the one who owns the asset, the party that collects lease payments is involved in the transaction but does not use the asset, and drafting the lease contract is administrative and does not affect the usage or financial implications of the lease itself. Therefore, identifying the lessee as the user who pays for the right to utilize the asset is crucial for understanding lease transactions and their financial reporting consequences.