BLM15550 - Lease accounting: finance lease accounting: finance lessees: example 1: lease terminated early - reconciliation of lessee's cash outlay
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.
On the basis of the information at BLM15540 and BLM15545
the total cash outlaid by the lessee can be reconciled with the charges made to its profit and loss account over the period of the lease until it is terminated to the to profit and loss account, as follows:
Cash position |
£ |
Rentals paid for primary period: 4 x £12,400 = |
49,600 |
Rebate received |
(29,100) |
Net outlay |
20,500 |
Charge to Profit and Loss Account |
|
Depreciation: 4 x £2,500 = |
10,000 |
Finance charges |
11,122 |
plus extra on disposal |
478 |
Profit on sale |
(1,100) |
Net charge |
20,500 |