Sales-type lease

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Sales-type lease

The leasing out of a firm's own equipment, such as a printing company leasing its own presses, thereby competing with an independent leasing company.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Sales-Type Lease

A lease whereby a company rents its own assets that it needs to run its business. For example, an automobile factory may lease its machinery to another factory.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
IMAX installed only six full new theater systems using sales or sales-type leases, and although the company did have eight installations of theaters under traditional or hybrid joint revenue-sharing arrangements as well as three upgrades of existing locations, they weren't enough to make up for the sales shortfall.
In direct financing arrangements, lessors, consistent with ASC 606 and unlike with sales-type leases, do not recognize any selling profit at the commencement of the lease because the arrangement does not transfer control of the underlying asset to lessees.
At the October meeting, the FRC expressed its concerns about accounting for sales-type leases. Ellis, for example, is unsure how investors can benefit from a lessor recognizing a significant loss on sales-type leases where a significant amount of the rents are contingent but those amounts can be reasonably estimated-particularly when the new revenue standard would require a seller to estimate variable consideration.
There were changes to sales-type leases to conform to the revenue recognition model under ASC Topic 606.
29--namely, that CareFusion is consulting with the SEC about its accounting policy for sales-type leases in its Pyxis medication and supply dispensing product lines.
30 the lessor owned 991 aircraft, with 11 more classified as finance and sales-type leases, while providing fleet management services on another 99.
You need to determine whether the leases are (1) direct financing or sales-type leases (henceforth, "financing leases") or (2) operating leases, because significantly different accounting procedures apply to the different lease types.
98 was issued in May 1988, and focuses on "Sale Leaseback Transactions Involving Real Estate, Sales-Type Leases of Real Estate, Definition of the Lease Term, and Initial Direct Costs of Direct Financing Leases." FAS 98 is just one of the modifications or expansions to FAS 13.
98, "Accounting for Leases: Sale-Leaseback Transactions Involving Real Estate, Sales-Type Leases of Real Estate, Definition of Lease Term, Initial Direct Costs of Direct Financing Leases." The leaseback may be classified as a capital lease or an operating lease.
Accounting for variable payments has been simplified, allowing sales-type leases with such arrangements to retain that classification.
98, Accounting for Leases: Sale-Leaseback Transactions Involving Real Estate, Sales-Type Leases of Real Estate, Definition of the Lease Term, and Initial Direct Costs of Direct Financing Leases.
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