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 ?
Comments have been submitted to Treasury to exclude from the scope of the final regulations transactions using a replacement lease structure when the nature of the economic investment and risks differ from a full payout lease over the longer term.
With long-term full payout leases, customers are considered conditional equipment owners.