Lease agreements: Tips, questions, and experiences
in Banking, Insurance & Loans ·
Nicole Morales3 said:What exactly constitutes an operating lease? Is this just standard leasing, or is it some term tweaked for local nuances—something Spajic looked down upon while interpreting accounting standards, insisting we don't have any unique specifics here?
Why even specify "operating" lease? Why not just call it leasing?
There are two main types: finance leases and operating leases.
The fundamental distinction is that with a finance lease, you eventually own the asset (like a car) once the final payment is made. With an operating lease, you don't; instead, you have the option to buy it out at a favorable rate or simply trade it in for something new.
(I'm sure there are folks on this forum who can provide a more technical breakdown)