Definition of capital lease in term of financial arrangement whereby a lessee pays rental for asset.
Capital lease is a financial arrangement underlying a agreement where a lessee uses asset for that a rental is paid. Fundamentally a capital lease covers the 90% of the supportive life of asset along with the option of acquiring the similar at the end of the lease period.
i.e. A factory building build on a land which has been taken on lease of 99 years with specific rentals as indicated by the agreement between lessor & Lessee.