Full-payout lease

Full-payout lease

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.
References in periodicals archive ?
It is not typical in the container leasing business for the equipment to be leased under lease purchase agreements or full-payout leases under which the customer agrees to pay sufficient rent for the lessor to recover the entire cost of the equipment.