New UK GAAP 2015: Application of FRS 100-102 in the UK

Chapter 16 Leases

1 Introduction

2 Comparison between Section 20, previous UK GAAP and IFRS

   2.1 Key differences between FRS 102 and previous UK GAAP

       2.1.1 Scope

1. 2.1.1.A Leases classified as financial instruments
2. 2.1.1.B Arrangements that do not take the legal form of a lease (‘embedded leases’)

       2.1.2 Lease classification

1. 2.1.2.A Inception of the lease

       2.1.3 Measurement: operating leases

1. 2.1.3.A Straight-line basis for lease payments
2. 2.1.3.B Lease incentives

       2.1.4 Measurement: finance leases

1. 2.1.4.A Initial direct costs
2. 2.1.4.B Recognition of finance income/gross earnings by lessors

       2.1.5 Disclosure: operating leases

   2.2 Key differences between FRS 102 and IFRS

       2.2.1 Scope

1. 2.2.1.A Transactions that are not, in substance, leases

       2.2.2 Measurement: operating leases

1. 2.2.2.A Straight-line basis for lease payments
2. 2.2.2.B Leases of land and buildings

3 Requirements of Section 20 for leases

   3.1 Scope

       3.1.1 Licensing agreements

       3.1.2 Arrangements over intangible assets

       3.1.3 Leases with non-typical contractual terms classified as financial instruments

       3.1.4 Arrangements that include services

   3.2 Determining whether an arrangement contains a lease

       3.2.1 A specified asset

1. 3.2.1.A Parts of assets and the unit of account

       3.2.2 A right to use the asset

1. 3.2.2.A Market price or fixed price per unit
2. 3.2.2.B Control of physical access and ability or right to operate the asset ...