Finance Leasing Manual - FLM10.05

Lessee accounting: general principles

Paragraph 32 of SSAP 21 states that

`A finance lease should be recorded in the balance sheet of a lessee as an asset and as an obligation to pay future rentals. ................`. (See FLM10.06 onwards).

Paragraph 36 of SSAP21 states that

`An asset leased under a finance lease should be depreciated over the shorter of the lease term (as defined in paragraph 19) and its useful life. ..........`. (See FLM10.09 onwards).