operating lease

(redirected from Operating leasing)

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.

Operating Lease

A lease in which the lessee maintains residence or usufruct of the leased property or asset while the lessor may claim a tax deduction on depreciation. For example, if one rents an apartment for a certain period of time and the lessor repossesses the apartment at the end of the lease, is a common example of an operating lease. See also: Off-balance-sheet financing.

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.

operating lease

An important accounting and income tax concept having to do with the determination of whether a lease (usually of personal property, but sometimes of real property) is a true lease, or whether it is a disguised lending arrangement. The operating lease is the true lease, and 100 percent of the payments are treated as expenses for accounting purposes and tax deductibility purposes.Sometimes called an off-balance sheet lease,meaning not that the lease is hidden or disguised,but it appears on the profit and loss statement rather than the balance sheet. Contrast with capital lease.In order to qualify as an operating lease,the transaction must meet the following requirements:

• The lease term is less than 75 percent of the estimated economic life of the equipment.

• The present value of lease payments is less than 90 percent of the equipment's fair market value.

• The lease cannot contain a bargain purchase option (i.e., purchase option for less than the fair market value).

• Ownership is retained by the lessor during and after the lease term.

References in periodicals archive ?
One common lease type is the short-term operating leasing agreement.
Finance leasing is more long-term than operating leasing.
None of the acquiring parties currently has any operating leasing activities in the British rail industry.
Tokyo, Japan, Dec 4, 2006 - (JCN) - Marubeni Corporation, with its US affiliate Marubeni America Corporation, announced on December 4 that it acquired 100% stake in Illinois based freight railcar operating leasing company Midwest Railcar Corporation (MRC).
The 15 managers and staff of IEM, which specialises in aircraft operating leasing, will be transferred to Abbey National as part of the agreement.
BCI Aircraft Leasing, Inc was founded in 1997 and since then has become one of commercial aviation's leading privately-held operating leasing companies.
GATX Financial specializes in railcar, locomotive, and aircraft operating leasing.
was founded in 1997 and since then has become one of the largest and fastest growing privately-held operating leasing companies in commercial aviation, with an ever-growing portfolio of commercial aircraft.
and Deutsche Structured Finance (DSF) today announced that DSF, in association with Deutsche Operating Leasing AG (DOL) have concluded a Memorandum of Understanding (MoU) for the purchase of 50 Bombardier CRJ(i) regional jets - plus 30 optioned aircraft.
DOL was created and launched in 1999 by DSF as a dedicated aircraft operating leasing company to address the growing market requirement for investments by German investors in aircraft leasing.
Activities in this market include: aircraft acquisition, operating leasing, lease and loan financing, fleet management and the participation in various aircraft partnerships.
A recognized leader in data communications equipment leasing, American supports major hardware manufacturers nationally with its operating leasing programs.