BLM23060 - Defining long funding leases: commencement and transition: pre-existing heads of agreement: relating to two or more assets (FA06/Sch8/Para25)
FA06/SCH8/PARA20 caters for pre-existing heads of agreement that relate to two or more assets.
Where the assets are to be used individually the principles in CAA01/S70M (BLM20300 onwards) are used to deem separate pre-existing heads of agreement. Each deemed pre-existing heads of agreement should be considered separately for the purpose of considering whether the transitional conditions are met.
Where the assets are to be used as part of a greater whole, that is they are constituents of a ‘combined asset’, the combined asset is to be treated as if it were a single asset for the purpose of determining whether the transitional provisions apply.
A combined asset is an asset that meets all the following conditions
- the asset is for use individually,
- it consists of two or more items of plant or machinery (referred to as constituent assets),
- each of the constituent assets is constructed to be used with the other constituent assets as part of the combined asset.
An asset that can be used individually is not a constituent asset just because it is one of a number of similar assets, the use of which is to be co-ordinated to any extent.
See examples at BLM23065.