BLM00230 - Introduction: Lease accounting: Finance lessee’s balance sheet

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.

A finance lessee is required by GAAP separately to show

  • the leased asset as its property in its balance sheet even though it doesn't legally own it; and
  • the ‘capital’ element it is due to pay in the rentals (the 'loan') as a liability in its balance sheet.