Defining long funding leases: commencement and transition: pre-existing heads of agreement: description of asset
The pre-existing heads of agreement must include details of the asset to be leased. The requirement to describe the asset will be met if the existing agreement describes a type of asset in sufficient detail to identify it.
For example, the existing agreement might be an arrangement for financing all the fixtures in a building that is currently under construction or refurbishment. The requirement to describe the asset will be met if the fixtures are described in project documentation seen by the potential lessor.
Given that the fixtures in a building are unlikely to be a single asset, it is likely the conditions in FA06/SCH8/PARA25 (‘Combined assets and constituent assets’) would also need to apply (see BLM23060).
In applying paragraph 25 of Schedule 8 to a building it may be necessary to consider whether one part of the building could be used without another part, particularly if the building is constructed or refurbished sequentially. For example, if a building is refurbished in two stages, one after the other, then it may be necessary to consider each stage separately.