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