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Finance Dictionary and Glossary of Investment Terms
Capital lease
Definition 1.
A lease obligation that has to be capitalized on the balance sheet.
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Definition 2.
A lease considered to have the economic characteristic of asset ownership.
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Definition 3.
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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