This video shows how to account for an operating lease from the perspective of the lessor. With an operating lease, the lessor does not remove the asset from its Balance Sheet. Instead, the lessor depreciates the asset it is leasing over its economic life (assuming it is a depreciable asset) and recognizes lease revenue in each period. In contrast to the accounting treatment for a finance lease, the lessor does not create an effective interest table and does not recognize interest revenue.