Full Payout Lease

As defined in SSAP21 a lease that transfers substantially all the risks and rewards of ownership to the lessee. A financing agreement whereby a lessee can acquire use of an asset for most of its useful life. Rental payments over the lease term are sufficient to enable the lessor to recover the full cost of the equipment, financing charges plus costs. At the end of the primary period of a finance lease the lessee may be able to continue to use the asset in return for renewal rentals but can never purchase the equipment.