Capitalizing leases quick and easy question question, remember, leases, higher, market

lxwarr30

When you capitalize an operating lease,
do you use the least of market rate or implied lease rate or the higher? I cant remember.

DoubleDip

lower of market, afair

lucasg85

use the YTM on recently issued debt or lower of market / fair

Iginla2011

you need to make the PV higher - so use the lower rate…
If the PV  90% of Fair Value - you capitalize, right…
SNOB principle::
Seventy five percent of Life
Ninety percent of Value
Ownership transfer at the end of lease
Bargain Purchase option