BNET Business Dictionary
Business Definition for: Capital Lease
a lease that is treated as though the lessee had borrowed money and bought the leased assets.
If a lease agreement does not meet any of the criteria below, the lessee treats it as an operating lease for accounting purposes. If, however, the agreement meets one of the following criteria, it is treated as a capital lease:
1. The lease agreement transfers ownership of the assets to the lessee during the term of lease.
2. The lessee can purchase the assets leased at a bargain price (also called a bargain purchase option), such as $1, at the end of the lease term.
3. The lease term is at least 75% of the economic life of the leased asset.
4. The present value of the minimum lease payments is 90% or greater of the asset's value.
capital leases are reported by the lessee as if the assets being leased were acquired and the monthly rental payments as if they were payments of principal and interest on a debt obligation. Specifically, the lessee capitalizes the lease by recognizing an asset and a liability at the lower of the present value of the minimum lease payments or the value of the assets under lease. As the monthly rental payments are made, the corresponding liability decreases. At the same time, the leased asset is depreciated in a manner that is consistent with other owned assets having the same use and economic life.
Additional Resources
- Capital Lease Aviation makes quiet debut.
- Capital Lease Aviation's Fokker planes receive a hefty valuation. Nigel Bolitho How short can a meaningful financial statement possibly be? There seems to be no rules governing this matter, but a three-page interim statement from Capital Lease Aviation seems modest by any standards...
- Research articles 2008-02-13
- Capital Lease Funding to Present at the Wachovia Securities 9th Annual Real Estate Securities Conference
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE), a net lease REIT, today announced that Mr. Paul McDowell, Chief Executive Officer, will present at the Wachovia Securities 9th Annual Real Estate Securities Conference at The New York Palace Hotel on December 7, 2005 at 10:00 a.m. Eastern time. Investors...
- Research articles 2005-12-02
- Capital Lease Funding to Present at the Friedman Billings Ramsey 2005 Investor Conference
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE), a net lease REIT, today announced that Mr. Paul McDowell, Chief Executive Officer, will present at the Friedman Billings Ramsey & Co., Inc. 2005 Investor Conference at the Grand Hyatt New York City on Wednesday November 30th, 2005 at 12:30 p.m....
- Research articles 2005-11-23
- Capital Lease Funding to Present at the Friedman Billings Ramsey 11th Annual Investor Conference
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE), a net lease REIT, today announced that Paul H. McDowell, Chief Executive Officer, and Shawn P. Seale, Senior Vice President and Chief Financial Officer, will be presenting at the Friedman Billings Ramsey 11th Annual Investor Conference in New York City on...
- Research articles 2004-11-26
- Capital Lease Funding to Present at Wachovia Conference on December 5, 2006
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE), a net lease REIT, today announced that Mr. Paul McDowell, Chief Executive Officer, will present at the 10th Annual Wachovia Real Estate, Gaming & Lodging Securities Conference in New York City on Tuesday, December 5, 2006 from 9:15 AM Eastern time...
- Research articles 2006-11-28
- Capital Lease Funding Closes Acquisition of $90.1 Million TJX Companies Property; Announces First Quarter Dividends
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today the closing of a $90.1 million acquisition of an approximately one million square foot warehouse and distribution facility in Philadelphia, Pennsylvania, net leased to a subsidiary of TJX Companies, Inc. through June 2021. TJX Companies, Inc. has guaranteed the...
- Research articles 2006-03-15
- Capital Lease Funding to Present at the 2006 Friedman Billings Ramsey Investor Conference
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE), a net lease REIT, today announced that Mr. Paul McDowell, Chief Executive Officer, will present at the 2006 Friedman Billings Ramsey Investor Conference in New York City on Tuesday, November 28, 2006 at 11:40 AM Eastern time.
- Research articles 2006-11-20
- Capital Lease Funding Acquires $97.5 Million of United States Government Properties
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today it has closed on the previously announced $97.5 million acquisition of a portfolio of five real properties leased entirely to the United States Government. The five properties are summarized below.Rentable Lease Property Description ...
- Research articles 2005-08-17
- Capital Lease Funding Agrees to Acquire $75.0 Million Tiffany Property
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today it has signed a definitive agreement to acquire the main operational facility for Tiffany & Co.'s worldwide enterprise from Tiffany for $75.0 million in a sale leaseback transaction. The approximately 368,000 square foot office and warehouse facility is located...
- Research articles 2005-09-26
- Capital Lease Funding Acquires Approximately $98 Million of Net Lease Properties in Two Sale Leaseback Transactions
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today the acquisition and related financing of approximately $98 million of net leased real estate properties in two separate sale/leaseback transactions, including the acquisition of three properties net leased to Allstate Insurance Company (currently rated AA/Aa2 by S&P/Moody's) for an...
- Research articles 2005-12-22
- Capital Lease Funding Clarifies Recent Stock Sale
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) clarified today that the sale of 1,295,566 shares of its common stock reported yesterday by its chairman, Lewis Ranieri, on a Form 4 filed with the SEC, represented a sale by Hyperion CLF LLC, not a sale by Mr. Ranieri. Hyperion...
- Research articles 2005-06-02
- Capital Lease Funding to Ring Closing Bell at New York Stock Exchange
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) today announced that in celebration of its first anniversary as a publicly traded company, the management and staff will ring the closing bell at the New York Stock Exchange at 4:00 pm EST.
- Research articles 2005-03-11
- Capital Lease Funding Changes Company Name to CapLease, Inc
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today that its board of directors unanimously approved changing the company's name to CapLease, Inc. The Company's ticker symbol, LSE, will remain the same.
- Research articles 2007-07-31
- Capital Lease Funding Retains McGladrey & Pullen as Independent Auditors
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today that it has retained McGladrey & Pullen LLP as its independent audit firm, replacing Ernst & Young LLP. The decision to change independent auditors was made by CapLease's audit committee. Shawn Seale, CapLease's Chief Financial Officer, said, "We...
- Research articles 2005-09-15
- Capital Lease Funding Closes Acquisition and Financing of $75.0 Million Tiffany Property
- NEW YORK -- Capital Lease Funding, Inc. (NYSE: LSE) announced today the simultaneous closing of the acquisition and financing of the previously announced Tiffany & Co. sale leaseback transaction. The $75.0 million acquisition of Tiffany's main facility for its worldwide operations was financed with a $58.4 million 10-year mortgage note...
- Research articles 2005-09-29
- Fitch Affirms Capital Lease Funding, Series 1997-CTL-1
- CHICAGO -- Fitch Ratings affirms Capital Lease Funding Securitization, L.P.'s corporate credit-backed pass-through certificates, series 1997-CTL-1, as follows: -- $16.4 million class A-2 'AAA'; -- $17.8 million class A-3 'AAA'; -- Interest-only class IO 'AAA'; -- $15.5 million class B 'AA+'; -- $15.5 million class...
- Research articles 2005-03-24
- Fitch Upgrades Capital Lease Funding Securitization, L.P
- CHICAGO -- Fitch Ratings upgrades Capital Lease Funding Securitization, L.P.'s corporate credit-backed pass-through certificates, series 1997-CTL-1, as follows: --$9.8 million class B to 'AAA' from 'AA+'. In addition, Fitch affirms the following classes: --Interest-only class IO at 'AAA'; --$15.5 million class C at 'A'; --$6.1...
- Research articles 2008-01-09
- Fitch Ratings Affirms Capital Lease Funding Series 1997-CTL-1
- Business Editors CHICAGO--BUSINESS WIRE--Aug. 7, 2002 Capital Lease Funding Securitization LP corporate credit-backed pass-through certificates, series 1997-CTL-1 $2.9 million class A-1, $40.4 million class A-2, $17.8 million class A-3 and the interest only class IO are affirmed at 'AAA' by Fitch Ratings. In addition, Fitch affirms the following...
- Research articles 2002-08-07
- Identifying Capital and Operating Leases
- Payments for leased corporate assets must be accounted for in financial statements, to accurately reflectthe company's financial obligations. There are two accounting methods, one for each type of lease: "operating" or "capital."The FASB Financial Accounting Standards Board has developed objective criteria to help managers identify the type of lease based...
- Articles 2007-08-13
- Assessing a Lease
- Leasing equipment can make a major difference to a company's finances, particularly in relation to capital expenditure. For example, money not spent on purchasing high-tech items which may quickly become obsolete can be released for other uses. Leasing also has tax advantages. But it's not always the best solution—it pays...
- Articles 2007-06-26
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