[Azathoth]

Originally Posted by Lawdog

No.

Lease- "An agreement under which owner fives up possession and use of his property for valuable consideration and for definate term and at the end of the term owner has absolute right to retake, control and use property. When used with referse to tangible personal property, word "lease" means a contratct by whicn one owning such property grants to another the right to possess, use and enjoy it for a specifed period of time in exhange for periodic payment of a stipulated price, referred to as rent."

Black's Law Dictionary 6th ed. pg 889.

If title transfers during the pendency it is not a lease. If it is a lease to own, the lease ends when title transfers.

As an accountant you should be aware of the distinction.

Ld

You are technically correct. I quote from the FA3 handbook:

Classification Criteria
A lessee should classify a transaction as a lease it if includes a noncancellable lease term and one or more of the three criteria listed. Otherwise it is an operating lease.

1. The agreement specifies that ownership of the asset transfers to the lessee or the agreement contains a bargain purchase option.
2. The noncancellable lease term is equal to 75 percent or more of the expected economics life of the asset.
3. The present value of the minimum lease payments is equal to or greater tha 90 percent of the fair value of the asset.

In my professional opinion, in the end, the legal definition would depend on how the lawyer wrote the agreement.