The following are some criteria to classify a sale and leaseback transaction as an operating lease [IAS17.7-14(R.05)]:
 

A sale has genuinely occurred, where all major risks and rewards were transferred to the buyer;
The buyer (lessor) cannot transfer the leased asset back to the seller (lessee);
The lessee has no bargain repurchase option and the lessor assumes […]

Tabulate below are the characteristic that indicates it as a Finance lease:-

Transfer of ownership at the end of the lease term to a lessee [IAS17.10(a)(R.05)].
The lessee has a bargain purchase option [IAS17.10(b)(R.05)].
The lease term covers the major part of the asset’s economic life [IAS17.10(c)(R.05)].
Payments made by a lessee that are a substantial portion of a […]

Summarized below the basic accounting treatment for Finance Lease.
 

In The Books of Lessee

At the inception the lessee should recognize the lease as an asset and a liability at an amount equal to the fair value of the leased assets.

The liability for a leased asset should be presented separately in the balance sheet as a current […]

Summarized below the basic accounting treatment for Operating Lease.
 

In The Books of Lessee

The lease payment should be recognized as an expense in the Income Statement on a straight line basis over the lease term.

In The Books Of Lessor:

The asset in its balance sheet is under fixed assets

Lease income is recognize in the Income Statement on […]

For those unfamiliar between Finance Lease and Operating Lease, tabulated below in summary some of the differences:

Finance Lease

Operating Lease

Lease period is normally related to the useful life of the asset

Usually of a shorter duration and bears no relation to economic life of the assets.

Is a non-revocable contract.

Is a revocable one.

The […]