The party who has legal title to the leased property and grants the lessee the right to use and possess the leased property in exchange for a rental amount. (Blake Cassels & Graydon LLP)

The interest rate that, at the inception of the lease, the lessee would have incurred to borrow (using similar terms) to purchase the leased asset. (KPMG LLP)

The party who is obligated to pay rental to the lessor in exchange for use and possession of the leased property. (Blake Cassels & Graydon LLP)

(Rental Payment)

The periodic rental payment to a lessor for the use of assets. Or the lease rate as the implicit interest rate in minimum lease payments. (U.S. Equipment Leasing Association)

The lease term is the fixed non-cancellable term of the lease plus:

all periods covered by bargain renewal options;

all periods for which failure to renew would impose on the lessee a penalty sufficiently large that renewal appears reasonably assured;

all periods covered by ordinary renewal options where the lessee has undertaken to guarantee the lessor’s debt related to the leased property;

all periods covered by ordinary renewal options preceding the date on which a bargain purchase option is exercisable; and

all periods representing renewals or extensions of the lease at the lessor’s option. (KPMG LLP)

A contract in which one party conveys the use of an asset to another party for a specific period of time at a predetermined rate. (U.S. Equipment Leasing Association)

Large Corporation Tax is a federal tax imposed on corporations with capital over $10 million. (Leasing in Canada [Third Edition], Ralph Selby, FCA, Butterworths, 1999)

[See Conditional Sale]

An instalment sale occurs when a vendor transfers ownership and possession to the purchaser immediately. The purchaser agrees to make payments over a period of time. An instalment sale is not a lease. (PricewaterhouseCoopers LLP)

The rate of return on an investment, calculated by finding the discount rate which equals the present value of future cash flows to the initial cost of the investment. (Leasing in Canada [Third Edition], Ralph Selby, FCA, Butterworths, 1999)

The discount rate that, at the inception of the lease, causes the aggregate present value of (a) the lessor’s minimum lease payments excluding executory costs; and (b) the unguaranteed value accruing to the benefit of the lessor to be equal to the fair value of the property at the inception of the lease. (KPMG LLP)