Lease accounting is a complex subject. The accounting
standards and the accompanying Guidance Notes are complex. Lease
accounting also commands much coverage in leasing text books. The
principal standards are SSAP 21 for UK GAAP and IAS 17 for IFRS,
but there are others that you may need to consider, see
BLM10015 onwards.
The paragraphs that follow do not attempt to repeat all that
detail, merely to explain enough to enable you to understand the
way in which leasing transactions are presented in accounts. If the
situation is unusual, particularly if it relies on accounting
treatment to avoid tax, and you think the accounting treatment may
be incorrect, you should seek the advice of your local advisory
accountant.
The accounting treatment of leasing differs markedly
according to whether the lease is a finance lease or an operating
lease.
In most aspects of lease accounting there are few practical
differences between UK GAAP and IFRS. Differences are mentioned
where appropriate.
In case of difficulty you should seek advice from your local
advisory accountant.
