As soon as delivery of the asset is made to the lessee, the lessee must acknowledge acceptance of the asset and authorize the lessor to pay the asset’s supplier. Delivery and acceptance (D&A) is the event in which a supplier provides a lessee with possession of an asset and the lessee accepts the asset in its received condition for the contractual purpose of the lease:
- Delivery – The legally recognized transfer of possession (receipt) of an asset;
- Acceptance – The act of receiving an asset from its supplier whereby the lessee uses a certificate of acceptance to acknowledge that the asset it received is proper and acceptable for the contractual purpose of the lease.
| Delivery and Acceptance in Lease Underwriting |
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The document signed by the lessee acknowledging that the lease asset has been received by the lessee, that the lessee accepts the asset in its received condition for the purposes of the lease and that its lease obligations are fully binding without further condition is a certificate of acceptance. The date of acceptance is the date when the lessee accepts an asset as delivered for the purpose under the lease, which is when its lease obligations are fully binding without further condition and the lease agreement closes. Acceptance certificates typically removes all remaining conditions precedent so that the lease agreement becomes fully effective and binding on all parties to the lease.
| Delivery Note → | Acceptance Certificate → | Acceptance Certificate |
|---|---|---|
| From Supplier to Buyer | From Buyer to Supplier | From Supplier to Lessor |