financial lease

Financial lease

Long-term, noncancellable rental agreement.

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.

financial lease

See capital 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.

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In practice, a Financial Lease comes into play when one party (who will be the lessee) desires to make use of machinery and equipment needed for the exercise of their business, or when they need to modernize the equipment they already posses while not having the money necessary to purchase such equipment.

Jordan: Financial leasing and its stimulation of the national economy

Reference: LLC "Financial Company for Support and Development of Credit Unions" is engaged in providing loans to credit unions, including financial leasing, forfeiting and factoring, in terms of maturity, repayment and payment of their own funds, as well as borrowing from financial institutions and government of Kyrgyzstan; conducts operations in the financial lease with members of credit unions of Kyrgyzstan with the obligatory participation of credit unions in the financing of operations on financial lease.

Board of National Bank considers sale of LLC "Financial Company for Support and Development of Credit Unions"

The package also includes approval of registration applications for ledger books and is compatible with the tax revisions for financial lease bookkeeping (for the fiscal year 2007) as required by the Japanese tax system.

Sumisho Computer Systems Corporation to Release Next Generation ERP Package

A financial lease is a long-term lease in which the present value of the stream of payments at the inception of the lease approximates the market value of the asset; such a lease is essentially similar to the purchase of the asset using credit.

Banking markets and the use of financial services by small and medium-sized businesses

However, the Yarmouth Report suggests that the underlying financial lease terms need to be adapted so that their economic worth to an institutional investor can be more readily quantified and analyzed on a standardized basis.