(d) Under the rental purchase system, the buyer only calculates the depreciation of the asset when he becomes the owner. The differences between the rental purchase system and the instalment payment system are as follows: like leasing, hire-purchase agreements allow companies whose working capital is not efficient to use assets. It can also be more tax efficient than the standard credit, as payments are accounted for as expenses – although any savings are offset by tax benefits resulting from depreciation. The total number under the rental purchase system is more than the cash price. In fact, this excess payment over the cash price is interest. It is very important to calculate interest because the amount paid for interest is encumbered on revenue and the asset is activated at the cash price. However, there may be a difference between the two: for some payment plans, the buyer obtains the ownership rights as soon as the contract with the seller is signed. In the case of lease purchase agreements, ownership of the goods is officially transferred to the buyer only after payment. .