Why is the current ratio higher for an operating lease over a capital lease. What part of accounting for a capital lease causes an increase in current liabilities. I thought all aspects of capital leases, both the asset and liability recognized, were non-current items.
Current portion of long-term lease obligation.
the next lease payment is the current liability
not quite. It’s only the amortization of the lease obligation that represents current liability. Interest portion of it is expense.