CAPITAL LEASE METHOD title: capital lease method (FI-AA) (SAP Library - Glossary)
CAPITAL LEASE METHOD category: Asset Accounting (FI-AA)
CAPITAL LEASE METHOD explained:
The capitalization of a leased asset in the amount of the present value of the future lease payments.
When you use this procedure, the leased asset must be shown in the balance sheet of the lessee, not the lessor. The periodic lease payments are not shown in the profit and loss statement of the lessee. Instead, periodic depreciation from the present value of the asset, including the interest resulting from the determination of the present value, is posted to profit and loss.
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