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
- Bedford Acquired.
- Capital Lease Funding has acquired Bedford Capital, which specializes in originating small-balance loans on properties leased to the U.S. Postal Service. The deal provides a new niche-lending capability for Capital Lease, a New York firm that writes and securitizes credit-lease loans. Bedford...
- Research articles 2000-01-10
- Lease Products
- It has been seen that two of the major equipment leasing benefits are the structure diversity and the various accounting and tax consequences of those structures. This article discusses some of the common structures and lease types. Some of the leases, which have been discussed, are finance lease, capital lease,...
- White papers 2003-01-01
- Lease Financing: An Alternative to External Financing
- This presentation talks about the magnitude of lease financing. It provides the information on different types of leases such as operating lease and capital lease. Accounting treatments for the different leases process is briefly presented in the presentation. Discusses the difference between lease and buy, lease and bank financing etc....
- Presentations 2003-01-01
- SAVVIS Amends Terms of Capital Lease Agreement
- ST. LOUIS -- SAVVIS Communications Corporation (NASDAQ:SVVS), a leading global IT utility, announced today that is has amended the terms of its Master Lease Agreement (the "Lease") with General Electric Capital Corporation ("GECC"). The Lease, which is described in SAVVIS' 10K and 10Q filings with the Securities and Exchange Commission,...
- Research articles 2004-08-27
- Bear Shops Lease Deal.
- Bear Stearns last week was shopping a $384 million credit-lease securitization for Capital Lease Funding. The deal is backed by loans on properties that are leased to tenants with a weighted average credit rating of single-A. New York-based Capital Lease contributed $333.1 million of the...
- Research articles 1999-08-09
- Leasing: Capital Formation and “The Art of Losing Money”
- This presentation enumerates leasing as a capital formation process and “the art of losing money”. It discusses the basic business of BNY capital funding. It focuses on types of leases and make the comparison of lease types from the lessor and lessee point of view. It discusses the lease structure...
- Presentations 2003-01-01
- A Lesson On Leasing
- Leasing equipment can be an attractive (and cost-effective) alternative to buying it. Making the decision to lease or buy is not for the faint of heart. There are more complicated factors to consider beyond comparing the anticipated return for leased equipment with that of a purchase. Some of the basic...
- White papers 2002-12-01
- ICG announces lease finance agreement with AT&T Capital Corp. for 5ESS switches
- DENVER--BUSINESS WIRE--Nov. 15, 1994--ICG Access Services Inc., a subsidiary of Intelcom Group Inc. (AMEX:ITR), and AT&T Capital Corp., have signed a capital lease agreement in which ICG will acquire nine AT&T 5ESS switches.
- Research articles 1994-11-15
- AeroMexico to lease 15 Boeing aircraft
- AIRLINE INDUSTRY INFORMATION-C1997-2003 M2 COMMUNICATIONS LTD AeroMexico is to add 15 Boeing 737-700 aircraft to its fleet under lease agreements. The Mexico City-based carrier has formed an agreement with Lombard Aviation Capital and International Lease Finance Corp to lease 11 of the 15 aircraft. The first aircraft is...
- Research articles 2003-03-06
- 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
- Commercial Lease
- You need to have a good understanding about commercial real estate before venturing out into leasing of a commercial property. You should be able to understand and realize all the terms of the lease that are mentioned for you to know what responsibilities you will have to fulfill during the...
- Tools & templates 2007-12-01
- Luxell Receives $2.1 Million Equipment Lease Financing from Bombardier Capital
- TORONTO--BUSINESS WIRE--Sept. 29, 1997--(Alberta Stock Exchange LUX. ) Luxell Technologies Inc. has received from Bombardier Capital a $2.1 Million equipment lease credit facility.
- Research articles 1997-09-29
- Economic Catastrophes: Real Estate in the Wake of Dot.coms, Recession and Terrorism
- Due to the constraints being placed on capital spending because of the recession and reduced earnings expectations, major capital expenditures such as lease obligations are, and have been, put off into the future. As an owner of real estate this is very good result due to the fact that a...
- White papers 2002-04-25
- GE Capital Financial signs $20 million lease for 120,000 square feet
- Salt Lake City-based GVA Business Properties Group has negotiated a $20 million, 10-year lease of office space for GE Capital Financial.
- Research articles 1998-04-06
- GE Capital Financial signs $20 million lease for 120,000 square feet
- Salt Lake City-based GVA Business Properties Group has negotiated a $20 million, 10-year lease of office space for GE Capital Financial.
- Research articles 1998-04-06
- 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 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 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
- The News Tribune, Tacoma, Wash., Business Briefs Column.
- The News Tribune, Tacoma, Wash. Knight Ridder/Tribune Business News Oct. 23--AIRTRAN ANNOUNCES PLAN TO LEASE 23 BOEING 717s: Discount airline Air Tran Airways will lease an additional 23 Boeing 717 jetliners from Boeing Capital Corp., Boeing and the airline announced Wednesday. ...
- Research articles 2002-10-23
- StorageTek intends to sell midrange lease assets to AT&T Capital unit
- LOUISVILLE, Colo.--BUSINESS WIRE--May 16, 1995--Storage Technology Corp. (NYSE:STK) said today that it has entered into a letter of intent with a unit of AT&T Capital Corporation to sell substantially all of the lease assets of its StorageTek Distributed Systems Division DSD.
- Research articles 1995-05-16
