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Definition

Operating leases

The renting of an apartment and the rental of a car at an airport are examples of operating leases. In an operating lease the intent is temporary use of the property by the lessee, while the lessor continues to own the property.

In an operating lease, the lessee records the lease (or rental) payments as an expense. The lessor records the payments as revenue. The lessee may incur other costs during the lease period.

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