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What is FAS13?

Anonymous

∙ 16y ago

Updated: 4/28/2022

FAS 13 is Statement 13 of the FASB. It is a statement involving Accounting for Leases. There are four criteria used to determine if the lease is considered a capital lease.

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∙ 16y ago

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When is a capital lease a better alternative than an operating lease?

It depends on your business needs. A capital lease allows you to carry an item on your books as if you own it, so any of the reasons for ownership would qualify. One good reason for opting for a capital lease is that at the end of the term, you may purchase the item for little more than what you've already invested. This is good, if the equipment is well-maintained and could last well beyond its useful life. I have to qualify the answer, though, because I am not sure if you are talking FAS13 definition of capital lease for financial reporting purposes or what some people call capital lease under the Internal Revenue Code (also known as conditional sale).

What is FAS13?

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When is a capital lease a better alternative than an operating lease?

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