What are operating lease

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Operating lease is a type of lease agreement where the lessee uses an asset for a specific period without ownership rights.

Operating lease is a short-term lease agreement where the lessee uses an asset for a specific period without ownership rights.
The lessor retains ownership of the asset and is responsible for maintenance and repairs.
Operating leases are commonly used for equipment, vehicles, and real estate.
The lease payments are treated as operating expenses and are tax-deductible.
At the end of the lease term, the lessee returns the asset to the lessor or may have the option to renew the lease or purchase the asset.
Operating leases are different from capital leases, which give the lessee ownership rights and require the asset to be recorded on the lessee's balance sheet.

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