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| 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.
| | Professional Indemnity Insurance. |
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| 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.
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| Under IAS 17 and SSAP 21, operating leases are accounted for 'off balance sheet' by the user of the asset.
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| 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.
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| == See also == | | == See also == |
| * [[ED 2010/9]] | | * [[Insurance]] |
| * [[Finance lease]] | | * [[PPI]] |
| * [[IAS 17]]
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| * [[Lease]]
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| * [[SSAP 21]]
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| ==Other links==
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| *[http://www.treasurers.org/node/8011 Operating lease accounting changes, The Treasurer 2012]
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| *[http://www.treasurers.org/node/8924 Students: A Lesson on leases, The Treasurer, April 2013]
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| [[Category:Asset_and_Project_Finance]]
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Revision as of 14:07, 9 September 2017
Professional Indemnity Insurance.
See also
