Definition of Full-service lease

Full-service lease

Also called rental lease. lease in which the lessor promises to maintain and insure the
equipment leased.

Accounting and Auditing Enforcement Release (AAER)

Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.

Break-even lease payment

The lease payment at which a party to a prospective lease is indifferent between
entering and not entering into the lease arrangement.

Capital lease

A lease obligation that has to be capitalized on the balance sheet.

Capital lease

A lease in which the lessee obtains some ownership rights over the asset
involved in the transaction, resulting in the recording of the asset as company property
on its general ledger.

Capital Lease

One where substantially all of the benefits and risks of ownership are transferred to the lessee. It must be reflected on the company's balance sheet as an asset and corresponding liability.

Concentration services

Movement of cash from different lockbox locations into a single concentration
account from which disbursements and investments are made.

Cost of lease financing

A lease's internal rate of return.

Debt service

Interest payment plus repayments of principal to creditors, that is, retirement of debt.

Debt-service coverage ratio

Earnings before interest and income taxes plus one-third rental charges, divided
by interest expense plus one-third rental charges plus the quantity of principal repayments divided by one
minus the tax rate.

Debt service parity approach

An analysis wherein the alternatives under consideration will provide the firm
with the exact same schedule of after-tax debt payments (including both interest and principal).

Direct lease

lease in which the lessor purchases new equipment from the manufacturer and leases it to the
lessee.

Double-dip lease

A cross-border lease in which the disparate rules of the lessor's and lessee's countries let
both parties be treated as the owner of the leased equipment for tax purposes.

Financial lease

Long-term, non-cancelable lease.

Financial Lease

lease in which the service provided by the lessor to the lessee is limited to financing equipment. All other responsibilities related to the possession of equipment, such as maintenance, insurance, and taxes, are borne by the lessee. A financial lease is usually noncancellable and is fully paid out amortized over its term.

Full cost

The cost of a product/service that includes an allocation of all the (production and
non-production) costs of the business.

Full-Cost Method

A method of accounting for petroleum exploration and development expenditures
that permits capitalization of all such expenditures, including those leading to productive
as well as nonproductive wells.

full costing

see absorption costing

Full coupon bond

A bond with a coupon equal to the going market rate, thereby, the bond is selling at par.

Full Credit Period

The period of trade credit given by a supplier to its customer.

Full Employment

The level of employment corresponding to the natural rate of unemployment.

Full-Employment Output

The level of output produced by the economy when operating at the natural rate of unemployment.

Full faith-and-credit obligations

The security pledges for larger municipal bond issuers, such as states and
large cities which have diverse funding sources.

Full-payout lease

See: financial lease.

Full price

Also called dirty price, the price of a bond including accrued interest. Related: flat price.

Fully diluted earnings per shares

Earnings per share expressed as if all outstanding convertible securities
and warrants have been exercised.

Fully modified pass-throughs

Agency pass-throughs that guarantee the timely payment of both interest and
principal. Related: modified pass-throughs
Functional currency As defined by FASB No. 52, an affiliate's functional currency is the currency of the
primary economic environment in which the affiliate generates and expends cash.

grade (of product or service)

the addition or removal of product
or service characteristics to satisfy additional needs, especially price

Index Portfolio Rebalancing Service (IPRS)

Index Portfolio Rebalancing service (IPRS) is a comprehensive investment service that can help increase potential returns while reducing volatility. Several portfolios are available, each with its own strategic balance of Index Funds. IPRS maintains your personal asset allocation by monitoring and rebalancing your portfolio semi-annually.

Information services

Organizations that furnish investment and other types of information, such as
information that helps a firm monitor its cash position.

Internal Revenue Service

A federal agency empowered by Congress to interpret and enforce tax-related laws.

Lease

A long-term rental agreement, and a form of secured long-term debt.

lease

Long-term rental agreement.

Lease (Credit Insurance)

Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee.

Lease Payment

The consideration paid by the lessee to the lessor in exchange for the use of the leased equipment/property. Payments are usually made at fixed intervals.

Lease Rate

The payment per period stated in a lease contract.

Lease Rate

The payment per period stated in a lease contract.

Leasehold improvement

This is any upgrade to leased property by a lessee that will be
usable for more than one year, and which exceeds the lessee’s capitalization limit.
It is recorded as a fixed asset and depreciated over a period no longer than the life
of the underlying lease.

Leasehold improvements

The cost of improvements made to property that the company leases.

Leveraged lease

A lease arrangement under which the lessor borrows a large proportion of the funds needed
to purchase the asset and grants the lender a lien on the assets and a pledge of the lease payments to secure the
borrowing.

Limitation on sale-and-leaseback

A bond covenant that restricts in some way a firm's ability to enter into
sale and lease-back transactions.

Litigation Release

Official SEC record of a settlement or a hearing scheduled before a civil
court judge of an alleged violation of one or more sections or rules of the securities laws. Typically,
a litigation release entails a more serious violation of the securities laws than an administrative
proceeding.

McNamara-O'Hara Service Contract Act of 1965

A federal Act requiring federal contractors to pay those employees working on a federal contract at
least as much as the wage and benefit levels prevailing locally.

Net lease

A lease arrangement under which the lessee is responsible for all property taxes, maintenance
expenses, insurance, and other costs associated with keeping the asset in good working condition.

Non-financial services

Include such things as freight, insurance, passenger services, and travel.

Operating lease

Short-term, cancelable lease. A type of lease in which the period of contract is less than the
life of the equipment and the lessor pays all maintenance and servicing costs.

Operating lease

The rental of an asset from a lessor, but not under terms that would
qualify it as a capital lease.

Operating Lease

One where the risks and benefits, as well as ownership, stays with the lessor.

Product/service mix

See sales mix.

Rental lease

See:full-service lease.

Safe harbor lease

A lease to transfer tax benefits of ownership (depreciation and debt tax shield) from the
lessee, if the lessee could not use them, to a lessor that could use them.

Sale and lease-back

Sale of an existing asset to a financial institution that then leases it back to the user.
Related: lease.

Sale and Leaseback

An agreement in which the owner of a property sells that property to a person or institution and then leases it back again for an agreed period and rental.

Sales-type lease

An arrangement whereby a firm leases its own equipment, such as IBM leasing its own
computers, thereby competing with an independent leasing company.

Sales-type Lease

lease accounting used by a manufacturer who is also a lessor. Up-front gross
profit is recorded for the excess of the present value of the lease payments to be received across
a lease term over the cost to manufacture the leased equipment. Interest income also is recognized
on the lease receivable as it is earned over the lease term.

service company

an individual or firm engaged in a high or moderate degree of conversion that results in service output

service department

an organizational unit that provides one or more specific functional tasks for other internal units

Service Revenue

Revenue recognized from the provision of services as opposed to the sale of
products.

service time

the actual time consumed performing the functions
necessary to provide a service

Short-term investment services

services that assist firms in making short-term investments.

True lease

A contract that qualifies as a valid lease agreement under the Internal Revenue code.

Uniformed Services Employment and Reemployment Rights Act of 1994

A federal act that minimizes the impact on people serving in the Armed Forces
when they return to civilian employment by avoiding discrimination and increasing
their employment opportunities.

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