capital lease

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Capital lease

A lease obligation that has to be capitalized on the balance sheet.

Capital Lease

A long-term lease in which the lessee must record the leased item as an asset on his/her balance sheet and record the present value of the lease payments as debt. Additionally, the lessor must record the lease as a sale on his/her own balance sheet. A capital lease may last for several years and is not callable. It is treated as a sale for tax purposes. It is also called a financial lease.

capital lease

The long-term lease of a capital asset. To the lessee, a capital lease is the same as owning the asset. Accounting rules require that the leased asset and the present value of the lease payments be recorded on the lessee's balance sheet. For the lessor, a capital lease is treated as a sale of the asset. Also called financial lease.
References in periodicals archive ?
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.
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.