How do you distinguish a capital (finance) lease from an operating lease?

• Classification turns on lease length alone, so an operating lease by definition always runs longer than a finance lease of the same asset
• An operating lease transfers title automatically once the final payment is made
• A finance lease transfers the risks and rewards of ownership (asset and liability recorded); an operating lease is more like a rental
• Both are capitalized identically, so each produces the same depreciation and interest split on the income statement
• A finance lease stays off the balance sheet as a footnote, while the operating lease is the one that gets capitalized as an asset and liability