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Structuring Equipment Financing: Lease Accounting Rules, Bundling Services and Software, UCC and Bankruptcy Treatment

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Wednesday, August 19, 2020

Recorded event now available

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This CLE course will examine important new developments in equipment financing, including the implementation of lease accounting standards and bundled lease structures which include service components. The panel will also discuss recent case law regarding "true lease" categorization, damages and other issues, and how tax reform might affect tax treatment of equipment leases.


While equipment finance practice evolves continuously, the area was impacted on several fronts in 2018 and 2019. Financial statement preparers for both lessees and lessors have had to identify and resolve the many technical accounting issues associated with the implementation of the new lease accounting standards (Accounting Standards Update No. 2016-02; Topic 842). At the same time, the 2017 tax reform bill had significant implications regarding the core issues about equipment finance.

Lessees need to determine financial reporting and tax objectives in structuring and pricing equipment leases going forward, including factors such as lease duration, control of equipment, lease payments, and purchase options.

The sale of equipment is often bundled with software and services provided by the vendor relating to maintenance and operation. This further complicates the related equipment finance transaction, which must contemplate continued involvement by the vendor and a separate service agreement (or, in some cases, a combined/bundled lease/service agreement) to operate in tandem with the equipment financing.

Several notable court rulings in 2018-19 involve disputes between parties to equipment financing transactions. The issues considered include whether a transaction documented as a lease creates a "true lease" or a UCC security interest; the rights of assignees; waivers of defenses and "hell-or-high water" payment obligations; vicarious liability of a lessor; and lessor's damages remedies. These cases provide valuable insight to counsel in structuring equipment finance transactions.

Listen as our authoritative panel discusses the recent changes and rulings that may affect the structure and enforcement of equipment financing transactions. The panel will also analyze how tax reform has changed the tax treatment of equipment leases, and will highlight certain equipment finance/emerging tech-related issues under consideration for related revisions to the UCC or its official comments, including bundled transactions and electronic chattel paper.



  1. Equipment finance: standard lease structures
    1. Capital leases
    2. Operating leases
  2. New lease accounting standard: change in treatment of operating leases
  3. Tax reform
  4. Bundled or mixed equipment transactions
  5. Recent case law
  6. UCC Emerging Tech Study – issues relevant to equipment finance transactions


The panel will review these and other key issues:

  • What is the significance of the new lease accounting standard, and how has it impacted equipment financing?
  • How should bundled services and products be reflected in equipment leases?
  • What do recent court decisions say about when a lease is deemed a "true lease" as opposed to a lease that creates a security interest? What is its significance in bankruptcy?
  • How does tax reform impact equipment financing?


Fishburn, Andy
Andy Fishburn, CLFP

Vice President, Federal Government Relations
Equipment Leasing and Finance Association

Mr. Fishburn joined ELFA in September 2012. He directs and operates all aspects of the association’s federal...  |  Read More

Gross, Edward
Edward K. Gross

Vedder Price

Mr. Gross has over 25 years of experience representing bank-affiliated and large, independent equipment financing...  |  Read More

Liberatore, Dominic
Dominic A. Liberatore

Deputy General Counsel
De Lage Landen Financial Services

Mr. Liberatore is the Deputy General Counsel for De Lage Landen Financial Services Inc., a global provider of leasing...  |  Read More

Nagus, Drew
Drew Nagus, CPA

Audit Principal
Baker Newman Noyes

Mr. Nagus specializes in serving mid-size businesses and large corporations in the manufacturing and distribution,...  |  Read More

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