CHAPTER 10 OPERATING LEASE

PAS 17, Paragraph 4

A leased is defined as an agreement whereby the lessor
conveys to the lessee in return or a payment or series of payments the right to use
an asset for an agreed period of time.
PAS 17, Paragraph 33 Provides that lease payments under operating lease shall
be recognized as an expense on a straight line basis over the lease term unless
another systematic basis is more representative of the time pattern of the users
benefit.
PAS 17, Paragraph 50 Provides that lease income from operating lease shall be
recognized as rent income on a straight line basis over the lease term, unless
another systematic basis is more representative of the time pattern in which users
benefit derived from the leased asset is diminished.

CHAPTER 11 FINANCE LEASE

PAS 17, Paragraph 4
A finance lease is a lease that transfers substantially all
the risk and rewards incident to the ownership of an asset. Title may or may not
eventually be transferred.
PAS 17, Paragraph 10 Characteristics/situations that would normally lead to a
lease being classified as a finance lease.
PAS 17, Paragraph 11 If the lessee can cancel the lease and the lessors losses
associated with the cancelation are borne by the lessee.
PAS 17, Paragraph 4
Circumstances when Cancelable lease is deemed
noncancelable and thus classified as finance lease
PAS 17, Paragraph 28 Provides that if there is reasonable certainty that the
lessee will obtain ownership by the end of the lease term, depreciation is based on
the useful life of the leased asset.