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Capital lease
Lease agreement that meets any one of four criteria: (1) The lease transfers title of the leased asset to the lessee. (2) The lease contains a bargain purchase option. (3) THe lease term is 75% or more of the estimated useful life of the leased asset. (4) The present value of the lease payments is 90% or more of the market value of the leased asset.
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- Part of Speech: noun
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- Industry/Domain: Accounting
- Category: General accounting
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