Open End (TRAC) Lease
An Open End or Terminal Rental Adjustment Clause (TRAC)
lease provides the greatest flexibility. With this type of lease you pay
only the principal balance and have no mileage or wear and tear provisions.
TRAC lease expenses may be designated as operating
leases under FASB 13 and can be foot-noted as off-balance sheet items.
This may enable you to improve ROA, avoid leverage restrictions and potentially
improve reported earnings.
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