What should a lessor include to qualify for statutory finance lease treatment?

• A. Provisions Reciting Compliance With The Process For Statutory Finance Lease Treatment
• B. A Non-Refundable Purchase Option
• C. A Bank Guarantee
• D. A Clause Waiving All Warranties

Answer: (A)

The key idea is that statutory finance lease treatment requires showing that the lease arrangement follows the formal process defined by the statute. A lessor must include provisions reciting compliance with that statutory process to provide clear evidence that the lease qualifies under the statute for finance lease classification. Without such explicit recitals, the lease may not be recognized as a statutory finance lease for regulatory or tax purposes, even if other lease terms resemble those of a finance lease.

Other features don’t establish this compliance. A non-refundable purchase option might indicate a finance lease in some contexts, but it doesn’t by itself prove adherence to the statutory process. A bank guarantee or a clause waiving warranties addresses risk or protections, not the required procedural compliance for statutory classification.