If the lease transfers ownership of the property to the lessee by the end of the lease term, this would not cause a lease to be declared a capital lease for accounting purposes.

Capital Lease

A lease agreement that designates the lessee (the party leasing the asset) as the owner for accounting purposes, and it generally spans a significant portion of the asset's life.

Accounting Purposes

The rationale or objective behind various accounting practices, often to comply with regulatory requirements or to provide clear financial information.

Lease Term

A fixed period during which a lessee has the right to occupy or use a leased asset.