capital lease

Capital lease

A lease obligation that has to be capitalized on the balance sheet.

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.

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.
References in periodicals archive ?
Contract award: finantseerimisteenuse hybrid buses, ordering the purchase of capital lease arrangement.
M2 EQUITYBITES-September 26, 2014-Avation buys more shares in Capital Lease Aviation
22 September 2014 - British aircraft leasing company Avation plc (LON:AVAP) said today it had entered into an agreement to purchase more than 21m shares in local subsidiary Capital Lease Aviation plc (LON:CLA) for GBP0.
The existence of these clearly delineated limits allows companies to structure leases in a manner that circumvents these specific bright lines and thus avoid recognition of the lease assets and associated lease liabilities that are inherent to capital lease arrangements.
Further, many lease arrangements that normally would have been capital leases were specifically designed to bypass the criteria that trigger capital lease classification.
If the lease is a capital lease, the lessee treats the leased asset as though it were purchased.
We are pleased to have consummated the sale of the Cadbury Schweppes facility to Capital Lease Funding," said Morreale.
14, 2002, plus the senior debt and capital lease obligations to be assumed, and including estimated transaction costs.
Properly designed, it can meet the requirements of an operating lease while qualifying under tax regulations as a capital lease.
Negotiate the Lease For Your Best Tax Benefit--Most leases are written as either an operating lease or a capital lease.
More than half of all firms reported outstanding credit in the form of a credit line, a loan, or a capital lease (table A.
This month's column continues with an explanation of a capital lease that includes a bargain purchase option.