Written by:
Image
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

View all posts
Updated August 12, 2020

What are Minimum Lease Payments?

Minimum lease payments are the lowest total amount that a renter can expect to pay during the term of a lease.

How Do Minimum Lease Payments Work?

When a landlord contracts a renter, the renter agrees to pay the landlord a specific periodic amount, or lease rate, for a predetermined amount of time (usually one year). The lease payments are the lease rate multiplied by the number of payment periods (usually monthly). The minimum lease payments are the lowest amount that a renter must pay once other costs (for example, utilities and insurance) have been accounted for.

Why Do Minimum Lease Payments Matter?

Minimum lease payments are an important calculation for commercial lessees and generally accepted accounting principles (GAAP) provide a framework for determining a lessee's minimum lease payments. The minimum lease payments are expressed as the present value of lease payments at the outset of a lease contract.

Ask an Expert about Minimum Lease Payments
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Minimum Lease Payments.
Be the first to ask a question

If you have a question about Minimum Lease Payments, then please ask Paul.

Ask a question

Read this next

Don't Know a Financial Term?
Search our library of 4,000+ terms
 - profile
Ask an Expert about Minimum Lease Payments

By submitting this form you agree with our Privacy Policy

Share
close