Finance Leasing Manual - FLM36.33

Cumulative normal rental excess

Paragraph 13 Schedule 12 FA 1997 also requires any cumulative normal rental excess to be computed using the same assumptions about periods of account and bad debts as the cumulative accounting rental excess which is the measure of the catching up charge. Where exceptionally there is such a cumulative normal rental excess at the time the lease first comes within Part II it may be carried forward in the same way as ordinary cumulative normal rental excess.