capital lease

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Capital lease

A lease obligation that has to be capitalized on the balance sheet.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
We limit our consideration of financial leasing to capital leases, as defined in FASB Statement #13.
Last month we discussed the difference between operating leases and capital leases. This month's column continues with an explanation of a capital lease that includes a bargain purchase option.
Certain lease agreements that are treated as operating leases for tax purposes are classified by lessee as capital leases for financial reporting purposes.
The purchase price is expected to be funded through a USD 70m secured term loan and USD 10.0m of assumed capital leases.
The year-to-date pro forma adjustments to EBITDA include $5.2 million for the anticipated conversion of William Charles' operating leases to capital leases and $3 million to remove corporate overhead costs that will not continue post-closing.
At end 31 December 2015, the total secured debt was USD625m, 3.2% of total gross debt and consisted primarily of capital leases.
The new rule requires companies to provide a "table" that reports the timing of future cash flows associated with 1) long-term debt, 2) capital leases, 3) operating leases, 4) purchase obligations and 5) other long-term liabilities reported on the balance sheet.
Many would argue yes, because, in reality, not all one-year-plus lease are capital leases.
Dollar General, after consulting with KPMG LLP, announced that it had incorrectly classified leases made in 1997 and 1999 for 400 stores, two distribution centers and its headquarters as operating leases rather than capital leases.
The transaction, estimated at $52 million, involves the sale of all of GTC's interest in Primedica for $26 million in cash, $16.5 million in Charles River common stock, and the assumption by Charles River Laboratories of all of Primedica's approximately $9.4 million of facility mortgages and long-term capital 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.
The most common loans from these sources are vehicle loans and capital leases. Such loans are generally secured by tangible assets and often supplied by the captive finance companies of manufacturers of automobiles and other equipment.