Definition:
An operating lease, is a short-term, cancelable lease of business equipment. In contrast to a capital lease, in an operating lease, the company providing the equipment continues to hold the lease as an asset. Operating leases last for considerably less than the life of the asset and servicing and maintenance are done by the lessor; for this reason, these leases are sometimes called "service leases."
Since the lease is considered a "true lease," the lessee cannot take tax deductions for depreciation on this type of lease.
Also Known As: service leases
Examples: An example of an operating lease is a lease on office equipment.
An operating lease, is a short-term, cancelable lease of business equipment. In contrast to a capital lease, in an operating lease, the company providing the equipment continues to hold the lease as an asset. Operating leases last for considerably less than the life of the asset and servicing and maintenance are done by the lessor; for this reason, these leases are sometimes called "service leases."
Since the lease is considered a "true lease," the lessee cannot take tax deductions for depreciation on this type of lease.
Also Known As: service leases
Examples: An example of an operating lease is a lease on office equipment.
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