Operating lease: Difference between revisions
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* [[SSAP 21]] | * [[SSAP 21]] | ||
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[http://www.treasurers.org/node/8011 Operating lease accounting changes | ==Other links== | ||
*[http://www.treasurers.org/node/8924 A Lesson on leases, The Treasurer, April 2013] | |||
*[http://www.treasurers.org/node/8011 Operating lease accounting changes,The Treasurer.July 2012] | |||
Revision as of 14:15, 2 October 2013
An operating lease involves the lessee (user) paying rentals for the hire of an asset for a period of time which is normally substantially less than the asset’s full useful life.
The owner (lessor) retains the significant risks and rewards of ownership - usually including the responsibility for maintenance, insurance and the like, and enjoyment of a significant residual value of the asset at the end of the lease term.
Under IAS 17 and SSAP 21, operating leases are accounted for 'off balance sheet' by the user of the asset. This means that the obligations/liabilities to pay future lease instalments are only disclosed in the notes to the financial statements, not on the face of the balance sheet.
See also
