Residual value a An option for the lessee to purchase the asset cannot be explicitly provided for in the lease agreement a However, the lessee indemnifies the lessor for any loss resulting from the sale at the end of the lease term Usually through the lessee purchasing the asset for the original residual value(usually between 10%o and 40 of the original costResidual Value ◼ An option for the lessee to purchase the asset cannot be explicitly provided for in the lease agreement. ◼ However, the lessee indemnifies the lessor for any loss resulting from the sale at the end of the lease term. Usually through the lessee purchasing the asset for the original residual value (usually between 10% and 40% of the original cost)