Goto Section: 32.2680 | 32.2682 | Table of Contents

FCC 32.2681
Revised as of March 14, 2019
Goto Year:2018 | 2020
  § 32.2681   Capital leases.

   Link to an amendment published at  84 FR 4729 , Feb. 19, 2019.

   (a) This account shall include all property acquired under a capital
   lease. A lease qualifies as a capital lease when one or more of the
   following criteria is met:

   (1) By the end of the lease term, ownership of the leased property is
   transferred to the leasee.

   (2) The lease contains a bargain purchase option.

   (3) The lease term is substantially (75% or more) equal to the
   estimated useful life of the leased property. However, if the beginning
   of the lease term falls within the last 25% of the total estimated
   economic life of the leased property, including earlier years of use,
   this criterion shall not be used for purposes of classifying the lease.

   (4) At the inception of the lease, the present value of the minimum
   lease payments, excluding that portion of the payments representing
   executory costs to be paid by the lessor, including any profit thereon,
   equals or exceeds 90% or more of the fair value of the leased property.
   However, if the beginning of the lease term falls within the last 25%
   of the total estimated economic life of the leased property, including
   earlier years of use, this criterion shall not be used for purposes of
   classifying the lease.

   (b) All other leases are operating leases.

   (c) The amounts recorded in this account at the inception of a capital
   lease shall be equal to the original cost, if known, or to the present
   value not to exceed fair value, at the beginning of the lease term, of
   minimum lease payments during the lease term, excluding that portion of
   the payments representing executory costs to be paid by the lessor,
   together with any profit thereon.

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Goto Section: 32.2680 | 32.2682

Goto Year: 2018 | 2020
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