5220 Operating Lease Expense

Operating lease expenses include payments for the use of Capital Assets not owned by the transit agency. Operating leases allow the transit agency to use assets, but do not allow them the rights of asset ownership (e.g., transfer of title). As such, operating leases are not capitalized as assets, but are recorded as operating expenses during the reporting period.

Some operating leases include costs that the agency must separate out and report under Services (5020). If part of the lease cost covers a service, rather than just the cost of the use of the asset, the agency reports this under Services (5020) rather than operating lease expenses. This also applies to Capital Leases (5230) and Related Parties Lease Agreements (5240).