Capital Lease Test Calculator

Determine if a lease is finance (capital) or operating under ASC 842

Current fair market value of the asset being leased at lease inception.
$
Non-cancelable lease period plus any renewal options reasonably certain to be exercised.
months
Total estimated useful economic life of the leased asset, not just the lease period.
months
Fixed periodic lease payment amount. Used to calculate present value of lease payments.
$
Rate implicit in the lease, or lessee incremental borrowing rate if implicit rate not known.
%
Option to purchase the asset at a price significantly below fair value, making exercise reasonably certain.
Is the asset so specialized that it has no alternative use to the lessor at the end of the lease term?

ASC 842 Classification Results

Lease Classification-
PV of Lease Payments-
PV as % of Fair Value-%
Lease Term as % of Economic Life-%
References: FASB ASC 842 - Leases; IFRS 16 - Leases (comparable international standard); PwC Leases Guide (ASC 842 implementation guidance).