BLM12015 - Lease accounting: operating lease accounting: lessor accounting for depreciation and costs

FRS 102 Section 20.26 requires the depreciation policy for leased assets to be consistent with the lessor’s normal depreciation policy for similar (non-leased) assets.

FRS 102 Section 20.27 requires any initial direct costs a lessor incurs in negotiating and arranging an operating lease to be added to the carrying amount of the leased asset and recognise such costs as an expense over the lease term on the same basis as the lease income.