If the lease term is 75% or more of the economic life of the asset, the lease needs to be classified as a capital lease.

Name: If the lease term is 75% or more of the economic life of the asset, the lease needs to be classified as a capital lease.
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According to Generally Accepted Accounting Principles (GAAP), a lease should be classified as a capital lease if the lease term is 75% or more of the estimated economic life of the leased asset.

If the Lease Term Is 75% or More of the Economic