Classification

The process, or the result, of determining whether a lease is a Finance lease or an Operating lease. Normally, classification is done automatically by EZLease, based on the five tests described in these articles: Classification of a lessee lease or Classification of a lessor lease.

ASC 842, IFRS 16, and GASB 87 introduce the additional classification of short term; IFRS 16 also introduces the low value classification but removes the operating classification for lessees.

You can run a Classification Summary report in order to see lease classifications for your entire portfolio, or a group a leases. The report can also be used to determine why a lease is classified a certain way, as it lists out the individual classification tests and results for each lease.