Explore jobs
Find specific jobs
Explore careers
Explore professions
Best companies
Explore companies
This question is about employer.
Capital lease vs. Operating lease
The difference between capital and operating leases is important in business and real estate. Both of them focus on different accounting methods for leases, but there are differences about them between both their function and process.
Operating leases are treated like rentals. Payments are considered operational expenses, and the leased asset is not used on a balance sheet. Capital leases are more like loans, as the asset is treated as if it was owned by the lessee and is used on balance sheets.
Key Takeaways:
| Capital Lease | Operating Lease |
|---|---|
| Capital leases are handled like loans. The asset is treated as if it was owned by the lessee and is used on balance sheets. | Operating leases are handled like rentals. The leased asset is treated as a loan and is not used on a balance sheet. |
| The lessee often purchases capital leases at the end of the lease term. | The lessor retains ownership during and after the lease term. |
| Because people may purchase the lease, capital leases often offer bargain purchase offers to buy the product under market value. | Operating leases cannot contain any bargain purchase offers. |
Choose from 10+ customizable resume templates
Zippia allows you to choose from different easy-to-use templates, and provides you with expert advice. Using the templates, you can rest assured that the structure and format of your resume is top notch. Choose a template with the colors, fonts & text sizes that are appropriate for your industry.
