BLM00205 - Introduction: Lease Accounting: Outline of lease accounting

As explained in BLM00020 the main leasing accounting standards for an entity preparing UK GAAP accounts are either FRS 102 Section 20 or FRS 101. As FRS 101 requires the recognition and measurement criteria of IFRS, references to UK GAAP hereafter refer to the application of FRS 102 only.

The leasing accounting standards under both IFRS and FRS 101 are either IAS 17 Leases or IFRS 16 Leases. IFRS 16 is effective for accounting periods beginning on or after 1 January 2019, with earlier application permitted. Prior to this IAS 17 was the relevant standard. As IAS 17 is similar to FRS 102 this manual focusses on FRS 102 and IFRS 16. A summary of the key differences between FRS 102 and IAS 17 is given at BLM10020.

The basics of accounting for operating leases under FRS 102 are described at BLM00210 and the basics of finance lease accounting under FRS 102 are at BLM00215 onwards.

A more detailed description of operating lease accounting under FRS 102 is given at BLM12000 onwards.

A more detailed description of finance lease accounting under FRS 102 is given at BLM13000 onwards.

The basics of accounting under IFRS 16 are at BLM00240. A more detailed description of IFRS 16 lease accounting is given at BLM17000 onwards.