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What are operating leases?

April 26, 2017leases operating

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What are operating leases?

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10 Posted

If you are studying the UK stream and have studied group accounts then you should be aware that FRS 6, Accounting for Acquisitions and Mergers has a similar problem in that it has to provide guidance for distinguishing business combinations between take-overs and mergers. The approach adopted by FRS 6, Accounting for Acquisitions and Mergers is that it goes into a lot of detail in the identification of business combinations which are mergers (i.e., a pooling of interests) but then simply states that all other business combinations must be take-overs. The accounting standards take a similar approach as an operating lease is defined as a lease which is not a finance lease!