A cancellable lease is generally an operating lease (rental ) that may be terminated by either the lessee or the lessor without penalty.

Which lease is non-cancellable?

The 'non-cancellable period' is the period during which the lessee cannot terminate the contract. The lease term cannot be shorter than the non-cancellable period.

What is cancellable and non-cancellable lease?

An operating lease is a lease other than a finance lease. A non-cancellable lease is a lease that is cancellable only: (a) upon the occurrence of some remote contingency; (b) with the permission of the lessor; (c) if the lessee enters into a new lease for the same or an equivalent asset.