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The indemnification clause in an equipment rental contract outlines who's responsible if something goes wrong while the equipment is in the customer's possession. In this clause, you should outline any specific rules or restrictions regarding how the equipment should be used.

For leases generally exceeding one year the applicable accounting rules dictate that the lessee account for a leased asset as though it has been purchased. The lessee records the leased right as an item of property, plant, and equipment, which is then depreciated over its useful life to the lessee.

Indemnification is the assumption of another party's liability under a contract, such as a lease. Therefore, under an indemnification clause, tenants typically agree to reimburse the landlord, or pay directly, ?all losses, claims, suits, liability, and expense? related to a liability situation.

The terms of an indemnification agreement ensure that you are not held liable for any contract-related loss or damage outside of your control.

In an asset purchase transaction, the seller and acquirer typically indemnify each other for losses arising from the agreement. Each party may also add their directors, officers, employees, and other affiliates and subsidiaries as indemnified parties.

Under ASC 842, companies are required to recognize most leased assets and liabilities on the balance sheet, thereby enhancing the transparency of lease obligations in the financial statements. The implementation of ASC 842 requires companies to record a right-of-use asset and a lease liability on their balance sheet.