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Leasing Glossary
Accelerated Cost Recovery System (ACRS)
The Tax Reform Act of 1986 established the modified ACRS tax appreciation system prescribing depreciation methods for each ACRS class in lieu of statutory tables. Equipment is assigned among 3, 5, 7, 10,15, or 20-year classes depending on ADR lives.
Acceptance Certificate
When leased Equipment is delivered and installed, the Lessee typically authorizes the Lessor, in writing, to pay for it. The Lessee's authorization to pay the supplier is indicated on an Equipment Acceptance Certificate form.
Bargain Purchase Option
A lease provision allowing the lessee, at its option, to purchase the equipment for a price predetermined at lease inception, that is substantially lower than the expected fair market value at the date the option can be exercised.
Big Ticket
A market segment, generally dominated by leveraged leases, represented by lease financing over $2 million.
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