There are two main accounting standards that cover leases.
Statement of Standard Accounting Practice 21 (‘SSAP
21’) defines a lease as
“a contract between a lessor and a
lessee for the hire of a specific asset. The lessor retains
ownership of the asset but conveys the right to the use of the
asset to the lessee for an agreed period of time for the payment of
specified rentals. The term 'lease' as used in this statement also
applies to other arrangements in which one party retains ownership
of an asset but conveys the right to the use of the asset to
another party for an agreed period of time in return for specified
payments.” (Paragraph 14 of SSAP 21)
International Accounting Standard 17 (‘IAS 17’)
defines a lease as
“an agreement whereby the lessor conveys
to the lessee in return for a payment or series of payments the
right to use an asset for an agreed period of time.”
(Paragraph 4 of IAS 17)
It is unlikely that there is any practical difference between
the two, but in cases of doubt or difficulty you should seek advice
from your local advisory accountant.
