A sales-type lease is used by manufacturers and includes a manufacturing or merchandising profit as well as interest income reflecting the financing element of the transaction.
A financial institution uses a direct-financing lease when the only profit is from interest income.
For a lessor to treat a lease as a capital lease (which they would generally prefer) it must meet at least one of the already discussed above and both of the following criteria:
Financial statement reporting for a sales-type lease
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