By contrast to the treatment of a finance lease (see BIM61030 - BIM61070) the accountancy treatment of an operating lease under SSAP 21 is straightforward. In economic substance, as well as legal form, an operating lease normally involves the simple hiring of an asset. Rentals should be charged (and recognised as the income of the lessor) on a straight-line basis over the lease term unless another systematic and rational basis is more appropriate (see paragraphs 37 and 43 of SSAP21).
For tax purposes the timing of rentals (payable or receivable) under an operating lease (see BIM61010) follows the correct application of generally accepted accounting practice.
