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). At the end of the sublease, when the asset is returned, the remaining right-of-use asset is transferred back to the headlease.