An operating lease is one where a lessee is allowed to use assets without owning them. From an accounting perspective, assets contracted through an operating lease are not represented on certain financial statements such as balance sheets.
A lease is an operating lease when any all of these criteria are met:
The life of the lease is less than 75% of the asset's useful life
The lease does not contain a purchase agreement for less than market value
The lessee does not gain ownership at the end of the lease period
The present value of lease payments is less than 90% of the asset's market value