operating lease

Operating Lease

A lease contract that allows the use of an asset, but does not convey rights similar to ownership of the asset.

Notes:

An operating lease is not capitalized it is accounted for as a rental expense.

See also: Capital Lease, Lease

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Operating lease

Short-term, cancelable lease. A type of lease in which the contract period is shorter than the life of the equipment, and the lessor pays all maintenance and servicing costs.

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operating lease

A short-term lease (such as that of a cable television connection box on a monthly basis) in which rental payments are made by the lessee and full ownership rights are kept by the lessor. An operating lease contrasts with a capital lease in which ownership of the asset effectively passes from the lessor to the lessee.