capital lease

Definition

A lease that meets one or more of the following criteria, meaning it is classified as a purchase by the lessee: the lease term is greater than 75% of the property's estimated economic life; the lease contains an option to purchase the property for less than fair market value; ownership of the property is transferred to the lessee at the end of the lease term; or the present value of the lease payments exceeds 90% of the fair market value of the property.

Use capital lease in a sentence

Featured Advertiser

Related Terms

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
capital investment loan operating lease