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.
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Related Terms
operating lease
'capital lease
' appears in the definitions of these other terms on BusinessDictionary.com financial lease, full payment lease, full payout lease, gross lease, net lease, and
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