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In simple words, a combination lease is a type of agreement that combines features from both capital and operating leases, allowing customers to customize their financial options for their individual needs.

The actuarial method of accounting for a finance lease allocates the interest to the period it actually relates to, ie the finance cost is higher when the capital outstanding is greatest, but as the capital gets repaid, interest payments become lower (similar to a repayment mortgage that you may have on your property).

1:07 8:24 Financial Math: Actuarial Method - YouTube YouTube Start of suggested clip End of suggested clip So here we see that we need the value of H in order to calculate the unearned. Interest K would beMoreSo here we see that we need the value of H in order to calculate the unearned. Interest K would be the number of payments remaining after payoff.

The constant yield method is a method of accretion of bond discounts, which translates to a gradual increase over time, given that the value of a discount bond increases over time until it equals the face value. The first step in the constant yield method is determining the yield to maturity (YTM).

The Constant Yield (Actuarial) method is similar to the Simple Interest method except that to pay off the loan early, you may have to pay the full remaining principal and interest (which is precomputed.) The lender should then refund the unearned interest to you.

The transfer of the right to use an asset in a leasing arrangement is considered a component similar to the delivery of an asset or providing services. Lease components are elements of the arrangement that provide the customer with the right to use an identified asset.

In particular an actuarial approach considers risks more broadly, seeking to understand the range of potential impacts and the interaction of risks, rather than adopting a distinct impact and probability for each risk separately.