If a lessee leases an asset to a third party, it is called 'sublessee'. Also see Headlease.

The original lessee acts as intermediate lessor and remains responsible for the lease payments to the original lessor. For IFRS 16 and ASC 842, when the sublease is a finance lease then the corresponding right-of-use asset is transferred to the sublessee and is no longer registered on the original lessee's contract (derecognition of the asset, recognition of an unguaranteed residual value). At the end of the sublease, when the asset is returned, the sublease unguaranteed residual value is transferred to the headlease right-of-use asset.