Finance leasing cash flows are predictable and lend
themselves ideally to computer analysis using net present value
analysis in one form or another, see
BLM30400.
In contrast, a typical operating lessor has to make normal
business judgments - how often will they hire out the asset over
its life, what charges will the market bear in the future and how
fast will the asset wear out or become obsolete? In such
circumstances a net present value analysis is not a great deal of
help. See
BLM00045 onwards for more on operating
leases generally.
However, in accountancy terms an operating lease is simply a
lease that is not a finance lease and, in the right circumstances,
the rentals can be calculated in much the same way as they can for
a finance lease, see
BLM31210.
