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HMRC internal manual

Business Leasing Manual

Lease accounting: finance lease accounting: finance lessees: example 2: apportioning the rentals

As with the lease in Example 1 (see BLM15505), the process for apportioning the rentals between the income and capital elements is:

Lease rentals (£1,000 x 3 years) £ 3,000
Lease rentals (£31,000 x 2 years) £62,000
Lease rentals (total) £65,000
Amount capitalised £50,000
Finance charges £15,000