Match the treatment of initial direct costs incurred by the lessor with the correct lease classification. Drag and drop application. Sales-type lease with selling profit Sales-type lease with selling profit drop zone empty. Sales-type lease with no selling profit Sales-type lease with no selling profit drop zone empty. Operating lease Operating lease drop zone empty. Deferred and expensed over the lease term by increasing the lease receivable Deferred and expensed over the lease term typically on a straight-line basis Expensed at the beginning of the lease