Criteria for Leases
Consideration of the Lessor in the classification of a lease as capital or operating
- Lease classification may be the same for the lessor/lessee or it may be different. This is because the lessor must meet both the following criteria in addition to meeting one of the previous four.
#1 The collectibility of the MLP is reasonably assured.
#2 Lessor’s performance is substantially complete. No significant uncertainties exist surrounding future costs to be incurred by the lessor.