he CRA (not accountants and/or lease practitioners) requires that a financial lease:

Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.

a. Terms stipulate that the lessee gains title to the leased asset at the end of the lease term.

b. Agreements provide for balloon lease payments within the first year of a multi-year lease

c. Payments exceed the normal depreciation expense on an asset during the early years of the asset's life.

d. Agreements have a legitimate business purpose other than tax avoidance.

e. Terms extend through the entire economic life of an asset and be based on fair market value.