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Capital Lease

   Also found in: Wikipedia 0.01 sec.
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.
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For capital leases the leased assets and the financing liability are recorded on the leasing company''s books as though the company had bought the equipment outright.
Business Financing Decisions by Paul Serellis / Business community
The synthetic lease is an agreement structured to appear as an operating lease for income-reporting purposes, and as a capital lease or a loan for tax-reporting purposes.
Maximizing Profits with a Synthetic Lease by Dorsey, Thomas A. / Appraisal Journal
Under Financial Accounting Standards Board statement number 13 (FASB 13), a capital lease transfers substantially all of the benefits and risks of ownership of the property to the lessee.
Financing your machine tool purchase by Purcell, Bill / Tooling & Production
 
 
 
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