Operating leases
- •
the accounting standard ‘FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland’ classifies a lease as an operating lease ‘if it does not transfer substantially all the risks and rewards incidental to ownership’
- •
a pure operating lease provides the lessee with the use of an asset for the term of the lease in consideration for the payment of rent to the lessor. At the expiry of the lease term, the lessee is obliged to return the asset to the lessor and has no further legal or economic interest in the residual value of the asset
- •
under an operating lease, the risk in relation to the asset or equipment falls upon the lessor rather than the lessee throughout the lease term (which is typically for a period of less than ten years)
- •
a synthetic operating lease is a lease which, although intended to finance the eventual acquisition of an asset by the lessee, is treated as an operating lease in accordance
Get your quote today and take step closer to being able to benefit from:
- Instant clarification on points of law
- Smart search
- Workflow tools
- 36 practice areas
Get a LexisNexis quote
* denotes a required field
To view the latest version of this document and thousands of others like it,
sign-in with LexisNexis or register for a free trial.
Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Key definition:
Applicable accounting standards definition
What does Applicable accounting standards mean?
Companies other than small companies or medium-sized companies must state in their accounts whether or not they have been prepared in accordance with ‘applicable accounting standards’. The frc considers that the Statements of Standard Accounting Practice (SSAPs), Financial reporting Standards (FRS), Financial Reporting Standard for Smaller Entities (frsse), and FRC Abstracts issued by the FRC are 'accounting standards' for the purposes of the CA 2006.
CONTACT US
