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 ?
The FSI recently returned from a trip to journey where authorities at the institute conducted a study of other national policies regarding operational leases and financial leases, according to Rashad.
Senchack, 1982, "The Case for Using Options to Evaluate Salvage Values in Financial Leases", Financial Management, 11:33-41
The financial products covered are checking accounts; other deposit and investment (savings) accounts; credit financial leases, lines of credit, mortgages, motor vehicle loans, equipment loans, and other credit);(6) transaction services (currency and coin services, credit card processing, and night depository); cash management services (cash management, lock boxes, and wire transfers); credit-related services (bankers acceptances, sales financing, letters of credit, and factoring); brokerage; and trust services (pensions, trusts, and safekeeping of securities).
The services most frequently obtained from such sources (mainly owners, other individuals, and other business firms) are financial leases, mortgages, equipment loans, and other credit.
* An inventory of the business's deposit and savings accounts, financial leases, credit lines, mortgages, motor vehicle loans, equipment loans, other loans, and selected other financial products for each financial service supplier used by that business

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