End-of-term flexibility
Fair market value equipment leasing.
Understand FMV equipment leases, end-of-term purchase pricing, return conditions, and questions for a U.S. financing partner.
An FMV equipment lease may offer purchase at future fair market value, renewal or return. The contract determines the available options and notice requirements. FMV does not automatically mean off-balance-sheet accounting.
What does FMV mean?
An FMV lease commonly describes a fixed equipment-use term with end-of-term choices that may include purchase at then-current fair market value, renewal, or return. The agreement determines which choices exist and how to exercise them.
A future purchase price is not a fixed buyout
If ownership at the end is important, ask how fair market value will be established, when a purchase quote becomes available, and how disagreements are handled. Do not treat an assumed resale value as a promised purchase price.
Return is an operational decision too
Ask about notice deadlines, required condition, accessories, packaging, shipping, data removal, and the date on which payment obligations end. Build the return process into the replacement schedule instead of treating it as an afterthought.
- Which end-of-term options are written into this offer?
- What happens if notice is late?
- Can part of a fleet be returned separately?
- Who pays to remove and transport the equipment?
Accounting still requires a separate assessment
FMV is not a guarantee of a particular accounting classification or off-balance-sheet treatment. Have the proposed agreement reviewed under the accounting framework applicable to your organization.
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Sources & further reading
Sources checked September 19, 2026. General information does not establish eligibility or the terms of a particular offer.
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