why capitalize leases for accounting adjustments
8. Account for all leases timely. A. Capital leases: the accounting for capital leases should be recorded at the lease inception date and must be recorded no later than quarter end. FAR makes adjustments to plant and equipment equity concurrently with the periodic lease payments.rocedures. 1. Understand rules for lease accounting. Leases that meet certain criteria must be recorded as assets to the lessor; these leases are called capital leases. Capital leases are recorded on the balance sheet and depreciated over time.
DEFINITION of 'Capitalized Lease Method'. An accounting approach that identifies a company's lease obligation as an asset on its balance sheet. This is done because although the company has not taken ownership of the asset, the transaction is still considered to be a beneficial economic exchange for the lease holder.EFINITION of 'Capitalized Lease Method'. An accounting approach that identifies a company's lease obligation as an asset on its balance sheet. This is done because although the company has not taken ownership of the asset, the transaction is still considered to be a beneficial economic exchange for the lease holder.