Capital Lease definition: Copy, customize, and use instantly
Introduction
The term "Capital Lease" refers to a lease agreement where the lessee assumes most of the risks and benefits of ownership, often leading to eventual asset ownership. It is essential for accounting, financial reporting, and determining liabilities under long-term lease agreements.
Below are various definitions of "Capital Lease" in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Capital Lease" as a finance-based lease agreement
This definition ties "Capital Lease" to long-term asset financing.
"Capital Lease" means a lease arrangement where the lessee records the leased asset as a capital asset on its balance sheet and assumes financial responsibility for its maintenance and operation.
Definition of "Capital Lease" as a lease meeting fasb criteria
This definition connects "Capital Lease" to accounting standards.
"Capital Lease" refers to a lease classified as such under the Financial Accounting Standards Board (FASB) guidelines, typically meeting criteria related to ownership transfer, lease term, and present value of payments.
Definition of "Capital Lease" as a lease leading to asset ownership
This definition links "Capital Lease" to ownership transfer.
"Capital Lease" means a lease agreement where the lessee gains ownership of the leased property at the end of the lease term through a bargain purchase option or automatic transfer.
Definition of "Capital Lease" as a non-cancellable financial obligation
This definition applies "Capital Lease" to fixed financial commitments.
"Capital Lease" refers to a long-term lease obligation that is non-cancellable and requires the lessee to make periodic payments, treating the lease as a financial liability.
Definition of "Capital Lease" as a lease with a bargain purchase option
This definition ties "Capital Lease" to purchase options below market value.
"Capital Lease" means a lease where the lessee has an option to purchase the leased asset at a price significantly lower than its fair market value at the end of the lease term.
Definition of "Capital Lease" as a lease requiring full economic utilization
This definition links "Capital Lease" to asset life and usage.
"Capital Lease" refers to a lease arrangement where the leased asset is used for most of its economic life, reflecting the intent of ownership rather than short-term use.
Definition of "Capital Lease" as a lease with total payment exceeding fair value
This definition applies "Capital Lease" to cost-based asset transfer.
"Capital Lease" means a lease where the total sum of lease payments exceeds or equals the fair value of the leased property, effectively financing its purchase.
Definition of "Capital Lease" as a liability recorded on financial statements
This definition ties "Capital Lease" to balance sheet treatment.
"Capital Lease" refers to a lease that must be recorded as a liability on the lessee's financial statements, reflecting its long-term commitment and debt-like structure.
Definition of "Capital Lease" as a lease covering 75% or more of asset life
This definition links "Capital Lease" to duration criteria.
"Capital Lease" means a lease agreement where the lease term equals or exceeds 75% of the estimated useful life of the leased asset.
Definition of "Capital Lease" as a lease where ownership risks transfer to the lessee
This definition applies "Capital Lease" to risk allocation.
"Capital Lease" refers to a lease structure where the lessee assumes most ownership risks, including maintenance, insurance, and depreciation of the leased asset.
Definition of "Capital Lease" as a structured asset financing arrangement
This definition ties "Capital Lease" to financial structuring.
"Capital Lease" means a lease structured as an alternative to traditional financing, allowing businesses to acquire essential assets while spreading payments over time.
Definition of "Capital Lease" as a lease with irrevocable long-term obligations
This definition connects "Capital Lease" to enforceable financial commitments.
"Capital Lease" refers to a lease where the lessee is legally obligated to make payments for the full lease term, with limited or no cancellation rights.
Definition of "Capital Lease" as a financing alternative to outright purchase
This definition links "Capital Lease" to capital budgeting.
"Capital Lease" means a lease agreement used as a financing alternative to purchasing an asset outright, helping businesses manage liquidity and cash flow.
Definition of "Capital Lease" as a lease financing depreciable assets
This definition applies "Capital Lease" to depreciation accounting.
"Capital Lease" refers to a lease where the leased asset is treated as a depreciable fixed asset on the lessee’s balance sheet, impacting financial reporting and tax calculations.
Definition of "Capital Lease" as a lease agreement meeting ifrs 16 criteria
This definition ties "Capital Lease" to international accounting standards.
"Capital Lease" means a lease classified under ifrs 16 where lessees recognize both an asset and a corresponding lease liability for long-term lease obligations.
Definition of "Capital Lease" as a financial tool for acquiring heavy equipment
This definition connects "Capital Lease" to industrial and commercial leasing.
"Capital Lease" refers to a lease structure commonly used for financing heavy machinery, vehicles, or commercial property acquisitions, providing long-term capital benefits.
Definition of "Capital Lease" as a lease with predictable fixed payments
This definition links "Capital Lease" to structured payment schedules.
"Capital Lease" means a lease agreement with predetermined periodic payments, ensuring financial stability and predictability in cost planning for the lessee.
Definition of "Capital Lease" as a structured leasing model for real estate
This definition applies "Capital Lease" to property leasing.
"Capital Lease" refers to a long-term real estate lease where the lessee effectively controls and operates the property as if they were the owner.
Definition of "Capital Lease" as an asset-backed lease financing arrangement
This definition ties "Capital Lease" to secured financing structures.
"Capital Lease" means a lease that serves as a financing mechanism where the leased asset acts as collateral, ensuring long-term financial stability for the lessee.
Definition of "Capital Lease" as a finance lease under accounting standards
This definition ties "Capital Lease" to financial reporting.
"Capital Lease" means a lease that is classified as a finance lease under Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), in which the lessee records the leased asset and related liability on its balance sheet.
Definition of "Capital Lease" as a lease with ownership characteristics
This definition connects "Capital Lease" to asset control.
"Capital Lease" refers to a lease agreement that transfers substantially all the benefits and risks of ownership to the lessee, including but not limited to an option to purchase the asset at the end of the lease term.
Definition of "Capital Lease" as a long-term financial commitment
This definition links "Capital Lease" to financing obligations.
"Capital Lease" means a contractual arrangement in which the lessee makes periodic payments for the use of an asset over a fixed term, with such lease meeting the criteria for capitalization under applicable accounting regulations.
Definition of "Capital Lease" as a secured financing arrangement
This definition applies "Capital Lease" to asset-backed obligations.
"Capital Lease" refers to a lease agreement in which the leased asset serves as collateral for the lessee’s obligation, with the lessee recognizing both the asset and liability for accounting and financial purposes.
Definition of "Capital Lease" as a non-cancelable lease
This definition ties "Capital Lease" to long-term obligations.
"Capital Lease" means a lease that is non-cancelable for a fixed term and requires the lessee to recognize both the leased asset and the corresponding liability in its financial statements.
Definition of "Capital Lease" as a lease with a bargain purchase option
This definition connects "Capital Lease" to lessee ownership.
"Capital Lease" refers to a lease agreement that includes an option for the lessee to purchase the leased asset at a price significantly lower than its fair market value at the end of the lease term.
Definition of "Capital Lease" as a lease with economic life coverage
This definition links "Capital Lease" to asset usage.
"Capital Lease" means a lease in which the lease term covers a substantial portion of the asset’s useful economic life, effectively transferring the risks and rewards of ownership to the lessee.
Definition of "Capital Lease" as a liability on financial statements
This definition applies "Capital Lease" to financial obligations.
"Capital Lease" refers to a lease recorded as both an asset and a liability on a company's balance sheet, reflecting the present value of future lease payments.
Definition of "Capital Lease" as a method of asset acquisition
This definition ties "Capital Lease" to business financing strategies.
"Capital Lease" means a lease structure that allows a lessee to acquire the use of an asset with a long-term financing arrangement rather than an outright purchase.
Definition of "Capital Lease" as a means of asset-based financing
This definition connects "Capital Lease" to credit arrangements.
"Capital Lease" refers to a financing method in which the lessee obtains the right to use an asset while assuming a liability equivalent to the cost of purchasing the asset.
Definition of "Capital Lease" as a transfer of substantial asset risks
This definition links "Capital Lease" to risk allocation.
"Capital Lease" means a lease that effectively transfers the risks associated with asset ownership, such as maintenance and obsolescence, from the lessor to the lessee.
Definition of "Capital Lease" as an equipment financing solution
This definition applies "Capital Lease" to leasing specialized assets.
"Capital Lease" refers to a lease structure commonly used in equipment financing, where the lessee retains effective ownership rights over the leased equipment.
Definition of "Capital Lease" as a means of reducing capital expenditures
This definition ties "Capital Lease" to corporate budgeting.
"Capital Lease" means a lease arrangement that allows a business to acquire assets while spreading the cost over time, thereby preserving cash flow and capital reserves.
Definition of "Capital Lease" as a compliance-driven lease classification
This definition connects "Capital Lease" to financial compliance.
"Capital Lease" refers to any lease classified as such based on accounting principles, requiring recognition of both an asset and liability under applicable financial reporting standards.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.