A specific classification of a lease for accounting purposes. The classification of the lease will determine how the lease is to be accounted for. A provision in the lease allowing the lessee to purchase the leased property for its fair market value, but not exceeding a certain amount. The advantage of the cap is that the lessee will know the maximum payment required to purchase the leased property. Certificate of Acceptance A written verification by the lessee that they have received the property to be leased.
Most leases begin after the date stated on the certificate of acceptance.
Commencement Date Date the base term of the lease begins. Coterminous Two or more leases that end at the same time. A report from a credit service, such as TRW or Equifax, that summarizes an individual's credit history with retail establishments and financial institutions. A guarantee by one corporation to pay the lease obligations of another corporation. If a lessee does not comply with the terms of the lease, a default occurs.