Hi!
So for operating leases, there is only one Income statement expense, which is your lease expense. The amortization in operating leases basically reduces the value of both your ROU asset and lease liability gets reduced at the equal amount hand in hand, for the term of the lease until it gets to 0 on the balance sheet.
In financing leases, it is not exactly the same. The Lease liability is based on the Present value of future payments as well as certain other things (report mnemonic in beckers). Where as the ROU asset is calculated inclusive of certain direct costs related to the execution of the lease agreement. While the lease liability gets reduced similar to operating leases, the asset is not exactly amortized. It is depreciated in a financing lease, since it becomes more or less under the control of the lessee. and for the depreciation we either take the life of the asset to depreciate the asset (if the O/W of the OWNES mnemonic is satisfied. If its just the N/e/s, then we would just consider the lower of the asset life or the lease life to depreciate. Its usually the lease life, that is used to depreciate, since its more likely than not to be lower.
It can be confusing. I am not sure why Beckers names it amortization for financing leases when it actually is a depreciation. Amortization is usually used for intangibles. Unless the asset leased is an intangible, because of which it is shown as amortization.
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