Operating lease

From CNM Wiki
Revision as of 04:33, 8 December 2020 by Gary (talk | contribs)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to: navigation, search

Operating lease is a leasing agreement that provides for both financing and maintenance. Generally, the operating lease contract is written for a period considerably shorter than the expected life of the leased equipment and contains a cancellation clause; sometimes called a service lease.


Definitions

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

Operating lease. Provides for both financing and maintenance. Generally, the operating lease contract is written for a period considerably shorter than the expected life of the leased equipment and contains a cancellation clause; sometimes called a service lease.

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Operating lease. A lease under which the lessor maintains and finances the property; also called a service lease.

Related concepts

Related lectures