Traditional Credit: Credit Lines, Loans, and Capital Leases
Last month we discussed the difference between operating leases and capital leases
Certain lease agreements that are treated as operating leases for tax purposes are classified by lessee as capital leases
for financial reporting purposes.
In order to compare the financial condition of companies that fund assets with different mixes of debt, capital leases
and operating leases, it is Fitch's procedure to adjust the financial ratios of corporate lessees (e.
Unlike capital leases
, neither an asset nor an obligation is recorded for operating leases.
Analogous to the accounting for capital leases
, the proposed accounting for nuclear decommissioning costs would result in a utility's recording an asset and a liability equal in magnitude only at the time of initial plant operation.
Shields disagreed, saying that dealers already figure in an interest rate as part of all capital leases
, which basically is a part of their inventory cost.
Over 80% of FedEx's balance sheet debt is unsecured, with capital leases
and a small amount of secured debt making up the remainder.
The company's total debt consists of $350 million in senior unsecured notes, $151 million in limited recourse debt related to the Atlas joint venture, and $32 million in capital leases
The two most common lease arrangements are capital leases
and operating leases.
Financing options available through ePlus include operating leases, capital leases
, loans, and sale-leasebacks of installed equipment.
Under the five-year agreement, GE Commercial Finance will offer its full range of equipment financing options to Getinge customers, which include operating and capital leases
, loans and customized financing programs.