This characteristic is determined by several economic criteria, which essentially classify the lease as a purchase. Capital leases give the lessee significant property rights.

These criteria include: the lease term is more than 75% of the property's estimated economic life, the lease provides the lessee with the option of purchasing the property for less than the fair market value, the lessee gains ownership of the property at the end of the lease term, or the present value of the lease term is more than 90% of the fair market value of the property. The lease is identified as a capital lease if it meets one or more of these criteria.

• accrual basis accounting
• operating lease
• asset class
• lease-purchase agreement