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Home > QFINANCE Dictionary > Definition of finance lease

Definition of

finance lease

Finance

lease treated like purchase a lease that is treated as though the lessee had borrowed money and bought the leased assets.

Related definitions of "finance lease"

Recommended Further Reading (Term count)
  • Classification and Treatment of Leases
    by Roger Lister
    Lease accounting is nearer than ever to its goal of reporting substance rather than form. International regulators and their national counterparts agree that right-to-use rather than legal title should determine the classification and treatment of leases. The choice is essentially between disclosing a lease as a financial instrument on the balance sheet or as an operating lease on the income statement.Financial reporting of leases is addressed...
  • Understanding the Requirements for Preparing IFRS Financial Statements
    by Véronique Weets
    International Financial Reporting Standards (IFRS), drawn up and published by the International Accounting Standards Board (IASB), are rapidly becoming the most globally applied set of accounting standards. Approximately 9,000 public companies in the European Union had transferred to IFRS reporting as of 2005. Russia, China, Canada, Japan, Australia, and many other countries, including those in the Middle East, are adopting IFRS or have plans to...
  • Distinguishing between a Capital and an Operating Lease
    Determining whether a lease obligation is an operating or capital lease, for financial reporting purposes, requires that it be evaluated on the basis of four criteria established by the FASB (Financial Accounting Standards Board). The criteria are objective rules for making a judgment about who, the lessor or the lessee, bears the risks and benefits of ownership of the leased property.If a lease is determined to be a capital lease, an asset and...
finance lease - Related Articles
  • Classification and Treatment of Leases

    Best Practice

    Why lease? Management needs to test conventional answers carefully since some have limited relevance, while others are frankly contestable. Leasing is sometimes promoted for its small initial outlay, even as 100% financing. This ignores the fact that a rational lessor like a lender will seek a
    By Roger Lister

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Definitions of ’finance lease’ and meaning of ’finance lease’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’finance lease’ and other financial terms with our online QFINANCE Financial Dictionary.

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