DIRECT FINANCING LEASE Definition

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DIRECT FINANCING LEASE is one in which the lessor's only source of revenue is interest. The lessor (generally a bank or other financial institution) buys an asset and leases it to the lessee. This transaction is an alternative to the more customary lending arrangement in which a borrower uses the loan proceeds to purchase an asset. A direct financing lease is the functional equivalent of a loan.

Learn new Accounting Terms

FINISHED GOODS INVENTORY (FGI) is that portion of goods in inventory which have completed manufacture and are available for sale.

BENCHMARK is a study to compare actual performance to a standard of typical competence; or, a standard for the basis of comparison as being above, below or comparable to.

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