Business Leasing Manual

BLM00025 - Introduction: Leasing: The accounting definition of a lease

This manual is being updated to reflect FRS 102 (2024 amendments). For guidance on the tax treatment of accounts prepared under IFRS 16 or the revised FRS 102, please refer to pages within the BLM50000 chapter.

FRS 102 (Appendix I Glossary) defines a lease as:

바카라 사이트淎n agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of time.바카라 사이트�

IFRS 16.9 takes an alternative approach by defining whether a contract is, or contains a lease:

바카라 사이트淎 contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration바카라 사이트�.

IFRS 16 Appendix B9 further requires an entity to 바카라 사이트渁ssess whether, throughout the period of use, the customer has both of the following:

바카라 사이트渁) the right to obtain substantially all of the economic benefits from use of the identified asset; and

b) the right to direct the use of the identified asset.바카라 사이트�

Whilst the requirements are different, conclusions about whether a lease exists are not expected to change in many cases.聽 In cases of doubt or difficulty and where the recognition of a lease is relevant to the tax position of the lessee or lessor you should seek advice from your local advisory accountant before reaching a conclusion.