Finance leases
The commercial accounting position is the same for the
finance lessor and for an actual lender. The commercial profit is
simply the interest earnings on the finance provided less any
expenses, including particularly the interest payable on the money
borrowed to fund the lending or the leasing.
The commercial accounting position is the same for the
finance lessee and for an actual borrower. The commercial profits
of both are arrived at by deducting the interest payable and the
depreciation of the asset (whether bought with the loan or leased
through the finance lease).
Operating leases
The commercial accounting position differs substantially
between an operating lessor, even where the lease is an alternative
to borrowing, and an actual lender.
