BIM61125 - Leasing: Finance lessees: allocation of finance charge

As indicated at BIM61050 there are a number of commercially acceptable methods of allocating the total finance charge element of rentals to each period of account for the purposes of SSAP 21. Any acceptable method used in the accounts which is broadly consistent with the intention set out in BIM61055 (to allocate finance charges in such a way as to give a constant return to the lessor on the total rentals outstanding) may be followed for tax purposes.