Operating lease and finance lease
– Operating leases are short term but finance/capital leases are long term
– Operating leases are cancelable/revocable but finance leases are not
– In operating leases maintenance and operating costs are borne by lessor (owner) but not for finance lease.
– At end of lease period, a lessee is given an option to buy the asset under finance under finance lease unlike under operating lease.
What are the differences between an “operating lease” and a “finance lease”?
