Accounting for finance leases is the process of recognizing, measuring and reporting lease transactions in accordance with the principles set out in international financial reporting standards. In other words, it’s a fancy way of accurately tracking a business’s financial leases so that the organization can make informed decisions about its finances. Finance leases are long-term agreements between two parties – usually a leasing company and an entity/person who wants to use some asset as collateral – where the leasing company agrees to pay for the asset up front, in return for periodic payments over a period of time. Accounting for finance leases helps you keep on top of all the liabilities involved, ensuring your businesses finances are sound.
Want to find out more about procurement?
Access more blogs, articles and FAQ's relating to procurement