Finance Leasing Manual - FLM2.25

Operating lessor: accountancy treatment

Paragraph 43 of Statement of Standard Accounting Practice 21 (SSAP 21) says:

'Rental income from an operating lease, excluding charges for services such as insurance and maintenance, should be recognised on a straight-line basis over the period of the lease, even if the payments are not made on such a basis, unless another systematic and rational basis is more representative of the time pattern in which the benefit from the leased asset is receivable.'

If you find out that bases other than straight-line are in use, please let Business Tax Division (Leasing) know.