In the course of their financial and economic activities, healthcare institutions quite often provide temporarily vacant premises for rent. The relationship between the tenant and the landlord is formalized by an agreement. What are the differences between finance and operating leases? How are transactions related to leasing property reflected in the accounting accounts? How to keep records of property leased before January 1, 2018?

On January 1, 2018, Order of the Ministry of Finance of the Russian Federation dated December 31, 2016 No. 258n came into force, approving the federal accounting standard for public sector organizations “Rent” (hereinafter referred to as the “Rent” standard). In order to switch to the application of the provisions of this standard, the Ministry of Finance has developed:

– Methodological instructions (contained in the appendix to the Letter of the Ministry of Finance of the Russian Federation dated December 13, 2017 No. 02-07-07/83463) (hereinafter referred to as Letter No. 02-07-07/83463).

Let us consider the issues raised in the preamble of the consultation, based on the information provided in the above letters and in the Lease standard itself, but first we will determine the difference between financial (non-operating) and operating leases. The correct classification of property as operating or financial (non-operating) leases is important for the correct reflection of these transactions in the accounting accounts.

What are the differences between operating and finance leases?

The Lease standard classifies leases into operating and finance (non-operating).

Leased property is classified for accounting purposes as an object operating lease , if the conditions of use of the property provide for the following (clause 12 of the “Rent” standard, section II.1 of Letter No. 02-07-07/83464):

1. The period of use of the property is shorter and incomparable with the remaining period beneficial use the property transferred for use, specified when it was provided. Here we note that the useful life of a lease accounting object is the period during which it is envisaged that the subject of accounting in its activities will use the lease accounting object for the purposes for which it was received (use for the purpose of obtaining economic benefits or useful potential associated with the use lease accounting object). When comparing the period of use of the property provided for by the terms of the contract and the remaining useful life of the property transferred for use, one should proceed from the obligation of the user of the property to return the leased (use) object upon completion of the right to use the property in a state that allows the right holder (owner) to use it in the future .

2. As of the date of classification of lease accounting objects, the total amount of rent (fees for the use of property, provided for by the contract for the entire period of use of the property) and the amount of all payments (redemption price) necessary to exercise the right to repurchase the property at the end of the period of use of the property, provided that the amount of such payments predetermines the implementation of the specified repurchase of the property after the expiration of the period of use of the property, is lower and incomparable with fair the value of the property transferred for use as of the date of classification of lease accounting objects.

Lease accounting items arising under a lease agreement, under which lease payments are only payments for the use of leased property (rent), are classified for the purposes of applying the “Lease” standard as operating lease accounting items (clause 15 of the “Rease” standard).

Lease accounting objects are classified for accounting purposes as objects of financial (non-operating) lease , if the conditions of use of the property provide for the following (clause 13 of the “Rent” standard):

1. The period of use of the property is comparable to the remaining useful life of the property transferred for use, specified when it was provided.

2. As of the date of classification of lease accounting items, the amount of all lease payments (expected economic benefits of the lessor) is comparable to the fair value of the property transferred for use, determined as of the date of classification of lease accounting items.

3. Transfer of ownership of the leased property to the tenant upon expiration of the lease period or before its expiration, subject to the payment by the tenant of the entire redemption price stipulated by the contract. At the same time, the size of the redemption price (redemption payments) is much lower market value property provided for use, taking into account its normal wear and tear upon completion of the period of use, that this predetermines the implementation of the specified redemption of the property by the user (tenant).

4. The property transferred for use is of a specialized nature, allowing only the user (tenant) to use it without significant changes (reconstructions (modifications)).

5. Property transferred for use cannot be replaced with other property without additional financial expenses.

6. The tenant’s priority right to extend the lease agreement for an additional period while maintaining the previous level of rental payments or rent, including below market value.

7. Losses (profits) from changes in the fair value of the property transferred for use during the term of the contract are attributed to the user of such property, including due to an increase in lease payments (rent) by a unilateral decision of the owner (copyright holder) of the property.

Lease accounting items arising under a lease agreement providing for the provision by the lessor of an installment plan for payment of lease payments (rent and (or) redemption value leased property) are classified for the purposes of applying the Lease standard as accounting items for financial (non-operating) leases.

In most cases, the terms of the lease agreement concluded by healthcare institutions, when providing property for temporary use for a fee, meet the conditions of an operating lease, therefore, below in the consultation we will consider the features of reflecting in the accounting accounts transactions for the transfer of property for use within the framework of an operating lease.

How are transactions under operating lease agreements concluded before January 1, 2018 reflected?

Since the concepts of “operating lease”, “financial (non-operating) lease”, as well as the “Lease” standard, begin to be used by state (municipal) institutions from January 1, 2018, healthcare institutions should:

renegotiate all leases entered into prior to this date that did not expire at the end of 2017;

determine whether the agreement is an operating or finance lease.

In order to identify lease accounting objects that are subject to reflection on the relevant accounting accounts (balance sheet, off-balance sheet), the institution must do the following:

1. Conduct an inventory of property received (transferred) for use in accordance with contracts concluded before January 1, 2018 and valid during the period of application of the “Rent” standard (under contracts valid both in 2017 and in the year(s) ), next(s) after it).

2. Determine the remaining useful life of operating lease objects (remaining terms of use of the property).

3. Determine the amount of obligations to pay lease payments for the remaining useful life of the objects (starting from 2018 and until the expiration of the terms of use of the lease accounting objects).

4. Generate an accounting certificate (f. 0504833) in order to form opening balances for lease accounting objects.

In the accounting statement, the lessor (balance sheet holder) of operating lease accounting items reflects the following transactions:

5. Reconcile the indicators of accepted lease accounting objects on balance sheet accounts and the indicators reflected at the end of 2017 (as of January 1, 2018) according to the corresponding analytical accounts of off-balance sheet accounts 25 “Property transferred for paid use (rent)”, 26 "Property transferred to free use».

6. Check the availability of information on the transfer of property (part of the property) to the user under an operating lease in the inventory card for accounting for non-financial assets (form 0504031) (hereinafter referred to as the inventory card (form 0504031)). With absence specified information it must be entered in the inventory card (f. 0504031).

7. Reconcile the forecast indicators for income reflected in the plan of financial and economic activities, in terms of rental payments, with the amount of expected income from rental payments (account 0 401 40 121) and, if necessary, adjust them.

Example.

As of January 1, 2018, the healthcare institution has a lease that is classified as an operating lease agreement. The contract expires in November 2018. The monthly rental payment is RUB 25,000.

When forming opening balances, the accounting accounts reflect transactions under an operating lease agreement:

How are transactions under operating lease agreements concluded after 01/01/2018 reflected in accounting?

From the provisions of the “Lease” standard, as well as letters No. 02-07-07/83464, 02-07-07/83463, it follows that in accounting when reflecting transactions for the provision of property for rent, following accounts:

– 0 205 21 000 “Settlements with payers of income from operating leases”, 0 205 22 000 “Settlements with payers of income from financial leases” (when reflecting settlements for lease payments with the user of the property);

– 25 “Property transferred for paid use (rent)”, 26 “Property transferred for free use” (information about property transferred for use is reflected);

– 0 401 40 121 “Deferred income from operating leases”, 0 401 40 122 “Deferred income from financial leases” (reflects the expected income from rental payments calculated for the entire period of use of the property provided for on the date of conclusion of the agreement (contract)) ;

– 0 205 35 000 “Calculations of income on conditional lease payments”, 0 401 10 135 “Income of the current financial year on conditional lease payments” (reflects income (calculations) on conditional lease payments arising on the date of determining their value (as a rule, monthly));

– 0 401 40 000 “Deferred income” (the account is used only when reflecting finance lease transactions, and is used to record interest payments).

According to the rules established from January 1, 2018, transactions performed by an institution under an operating lease agreement will be reflected as follows:

1. We reflect the transfer of property leased as an internal movement of the object. According to paragraph 24 of the Lease standard, the transfer of an operating lease accounting object to the user (lessee) is reflected by the lessor on the date of classification of the leased object as an internal movement of a non-financial asset without reflecting its disposal in the accounting accounts.

This is reflected in the accounting accounts as follows:

	Debit	Credit
The operation of internal movement of an object is reflected in the amount of the book value of the property (equipment) transferred for use.	0 101 34 310 0 101 24 310	0 101 34 310 0 101 24 310
Information is reflected on the balance sheet value of operating lease objects transferred for use, simultaneously with the reflection on balance sheet accounts of transactions on the internal movement of an object of a non-financial asset (reflection in the inventory card (f. 0504031) of a note on the transfer of the object (part of it) for use to another legal holder) on the corresponding off-balance sheet accounts

Note: when transferring for use a part of an inventory item of a fixed asset in the case where the institution has not made a decision to separate the transferred part of the property (for example, a separate piece of equipment, a car, part of the premises), correspondence on internal movement or separation of the transferred part of the inventory item is not reflected in accounting .

2. We reflect the transfer of the object (part of the object) for use legal entity in the inventory card (f. 0504031).

3. We continue to charge depreciation on the object (part of the object) leased. Calculation of depreciation of fixed assets, recognized as an object accounting for operating leases is carried out with the reflection of expenses of the current financial period, separated in the corresponding accounts of the working chart of accounts of the accounting entity. Depreciation is calculated in a linear way taking into account the completion date of depreciation accrual, the norms of depreciation charges determined for the fixed asset object recognized as a rental accounting object when it was accepted for accounting (Section III.3 of Letter No. 02-07-07/83464).

4. We reflect income from granting the right to use an asset under an operating lease. According to clause 24 of the “Lease” standard, on the date of classification of the leased object (when transferring an operating lease accounting object to the user (lessee), during internal movement of a non-financial asset), the following lease accounting objects are recognized by the lessee in accounting:

The lessee (calculations for income from property) in the amount of the lessee's (user's) obligations for rental payments for the entire period of use of the lease accounting object;

future income from granting the right to use the asset (future income expected from the lessor's fulfillment of the obligation to provide the property for use) in the amount of lease payments for the entire period of use of the lease accounting object.

In the accounting accounts, entries for the recognition of future income from granting the right to use an asset are reflected as follows:

5. On the expense authorization accounts we reflect the planned (forecast) assignments for income from operating leases. These transactions will be reflected in the accounting accounts as follows:

6. Let’s compare the indicators for accounts 2,401 40,121 “Deferred income from operating leases” and 2,504 00 121 “Estimated (planned, forecast) assignments from income from operating leases” with the volume of assignments reflected in the approved financial and economic activity plan , and, if necessary, we will make adjustments to the indicators of the financial and economic activity plan.

7. We will reflect the recognition of income for the current financial year from the provision of the right to use an asset under an operating lease (that is, we will transfer from future income to current period income).

Recognition of income from granting the right to use an operating lease asset as income of the current financial year is carried out in one of the following ways (clause 25 of the “Lease” standard):

1) evenly (monthly) throughout the period of use of the lease accounting object;

2) in accordance with the established lease agreement (property lease) schedule for receiving rental payments (rent).

In the accounting accounts, operations to recognize income of the current financial year are reflected as follows:

In the case of receipt of lease payments (rent) in accordance with the schedule established by the agreement, the difference between the credit indicator (balance) on account 0 401 40 121 and the debit indicator (balance) on account 0 205 21 000 reflects the debt for settlement of lease payments :

a) if the value is negative – the lessor’s receivables for payments, the payment period of which has come according to the schedule provided for in the agreement;

b) if the value is positive – the volume of preliminary (advance) payments paid earlier than the deadlines provided for by the payment schedule.

When income from an operating lease (the right to use an asset) is recognized as income for the current financial year, previously recognized future income from an operating lease (the right to use an asset) is reduced.

8. We recognize expenses for the maintenance of property transferred under an operating lease, subject to further presentation to the lessee (user) for reimbursement. Costs of maintaining the rental property (for example, operating costs, maintenance costs, current repairs), produced by the lessor (balance holder of the property) in accordance with the agreement (contract) concluded by him, are reflected in the generally established procedure (based on relevant documents confirming the volume of work performed and services consumed).

The accounting entries reflected in the accounting records when incurring the costs of maintaining the property (when accepting the corresponding obligations) will be as follows:

9. We reflect expenses on conditional rental payments (income from reimbursement of costs for the maintenance of property transferred for use). Accounting entries for the reflection of income received by the institution from reimbursement by the tenant of the costs of maintaining the leased property are reflected in the debit of account 2,205 35,560 “Increase in accounts receivable for income from conditional lease payments” and the credit of account 2,401 10,135 “Income from conditional lease payments” .

At the end of the consultation, we note:

1. A lease agreement is classified as an operating lease or a finance (non-operating) lease.

2. The transfer of property under an operating lease agreement is formalized as an internal movement of the object. When transferring a part of the property for rent, the operation of internal movement of the object is reflected only if, by decision of the institution, the transferred part will be removed from the general property and accepted for accounting as a separate object.

3. The accounting policy of the institution in relation to the rules for maintaining accounting records of lease accounting objects must provide for:

applied depreciation methods for groups of lease accounting objects (we recommend establishing a straight-line depreciation method);

features of the use of primary (consolidated) accounting documents when reflecting transactions on lease accounting objects, including when changing their value estimates in accounting, early termination of use agreements, reclassification of lease accounting objects;

the procedure for conducting an inventory of lease accounting objects, adopted taking into account the provisions of Order No. 52n.

Lease is an agreement under which the lessee is given the right to use the leased property for a specified period in exchange for rental payments to the lessor. According to IFRS, there are two types of leases: finance and operating.

Finance lease(English: financial lease) is a lease, under the terms of which there is a significant transfer of all the risks and benefits associated with ownership of the asset. At the same time, risks are the possibility of losses due to equipment downtime, the use of outdated technologies, changes in market conditions, etc. Benefits arise during the economic life of the asset, and benefits may also be income from appreciation in value of the asset.

Accounting for finance leases under IFRS is carried out in accordance with IAS 17 Leases.

Conditions under which a lease is considered a finance lease:

• The tenant receives ownership of the property at the end of the lease term;
• The tenant gets the opportunity to purchase the property at a discounted price and, most likely, he will use this right;
• The lease term accounts for the majority of the economic life of the asset;
• The discounted value of the minimum lease payments is close to the fair value of the asset;
• Leased assets are of a specific nature and are suitable for use only by a given lessee

Earth usually has an unlimited economic life.

More often than not, if there is no transfer of ownership to the tenant at the end of the lease, then virtually all the risks and benefits of ownership are not transferred.

Therefore, land leases are generally classified as operating leases.

Building. The useful life most often significantly exceeds the lease term. Under these conditions, if ownership does not pass at the end of the lease term, then the risks and rewards of ownership remain with the lessor and the lease would likely also be classified as an operating lease.

In accordance with IFRS standards, the lessee accounts for the asset received under a finance lease agreement as its own, while simultaneously recording finance lease position in an amount equal to the lesser of:

• fair value of the asset or
• discounted value of minimum lease payments

The depreciation policy for leased assets should be consistent with that used by the lessee for its own assets.

Disclosure of information in financial statements under IFRS

The lessee company discloses the following information in relation to assets under finance lease:

• the net book value for each asset class at the reporting date;
• The Company discloses the total amount of future minimum lease payments at the reporting date and their present value for each of the following periods:

No later than one year;

After five years.

· general description significant contracts leases entered into by the Company.

· availability of conditions for extending the lease term or purchase of an asset.

The lessor discloses the following information in relation to assets under finance lease:

• a reconciliation between the amount of the finance lease investment at the reporting date and the present value of the minimum lease payments receivable. In addition, an entity shall disclose the investment in leases and the present value of minimum lease payments receivable at the reporting date for each of the following periods:

No later than one year;

After one year, but not later than five years;

After five years.

• financial income;
• non-guaranteed residual value;
• accumulated valuation reserve to cover outstanding debt on minimum lease payments;
• rent recognized as income in the reporting period;
• A general description of the material leases entered into by the lessor.

When accounting for leases according to both Russian and international standards, financial services of companies have many questions. How to classify it? Who should reflect the property on its balance sheet - the lessor or the lessee? How to distribute income and expenses between reporting periods? In this article we will look at the differences in approaches to solving these problems that IFRS and RAS offer.

Lease: operating or financial?

In order to correctly reflect a lease agreement in accounting, it is first necessary to find out what type of lease it is: operating or financial, that is, leasing.
Let's start with Russian legislation. To answer this question, you need to refer to the Federal Law of October 29, 1998 No. 164-FZ “On Financial Lease (Leasing)” (hereinafter referred to as the Leasing Law). According to it, the contents of the leasing agreement should be as follows. The lessor acquires ownership of the property chosen by the lessee from a specific seller. The lessor must provide the tenant with this property for temporary possession and use for a fee.
Accordingly, rental relations under such agreements are classified as leasing. All the rest must be taken into account as other rent, that is, operating rent. Thus, leases are classified solely depending on how the agreement is drawn up. Please note: the manufacturer cannot act as a lessor in relation to its own products.
In turn, IFRS divide leases into financial and operating leases depending on the economic content of the transaction. The first step is to find out who bears the risks associated with owning the asset and benefits from its use.
Thus, international standards classify as leasing the rental of property, all risks and economic benefits from the use of which are transferred from the lessor to the lessee.

“International” signs of leasing

IFRS offers 5 criteria that can be used to determine whether the risks and economic benefits associated with the leased asset have actually transferred from one partner to another:
1. By the end of the contract term, the lessee becomes the owner of the asset. Since the property will remain with the lessee for its entire useful life, the risks and rewards will pass to him.
2. At the end of the lease term, the lessee has the right to purchase the asset at a price that is significantly lower than its fair value at the time of such transaction. At the same time, even when concluding a lease agreement, the tenant must be sure that the property will be sold to him. That is, at the end of the lease period, ownership of the asset must pass to the lessee, although this is not subject to the obligations of the parties to the agreement.
3. The lease term represents a significant portion of the useful life of the asset. In this case, ownership of the property may not pass to the tenant. But since he will use the asset for most of its useful life, he will also reap most of the economic benefits.
Note that IFRS does not establish clear criteria by which to determine what part of an asset's service life is significant. In practice, 75 percent is usually used. However, do not forget that this is only an approximate value. It does not always indicate that the lease should be classified as financial.
4. The discounted value of lease payments on the date of signing the contract is equal to the fair price of the asset or constitutes a significant part of it (in practice, the figure is 90 percent). That is, in the described situation, the tenant actually buys the property with an installment plan.
5. The property is such that only the tenant may use it without significant modification.
So, the lease is classified. If this is an operating lease, then the differences in accounting under RAS and IFRS will be insignificant. But the accounting rules for finance leases are fundamentally different.

Balance dispute

It is necessary to find out which of the parties to the financial lease agreement will accept the property on their balance sheet.
In Russian accounting, the text of the contract will be of decisive importance. After all, partners can decide on the subject of leasing by mutual agreement (Article 31 of the Leasing Law).
In accordance with IFRS requirements, if a lease is classified as a finance lease, then the lessor must write off the property from its balance sheet. The tenant must take into account his own valuables. In Russian accounting, the asset may remain on the lessor’s balance sheet by agreement of the partners. In this case, the lessee will account for such property in an off-balance sheet account.

Accounting for a finance lease by a lessee...

1. Initial recognition. At the beginning of the lease period, the lessee needs to show the received assets and resulting liabilities on its balance sheet. IN general case property is valued at fair value. If it turns out to be more than the discounted amount of the minimum rental payments, an entry is made in the accounting for the amount of the rental payment. That is, property is reflected at the lower of two estimates (the principle of conservatism).
The present value of the minimum lease payments is determined based on the interest rate included in the lease. The latter is also called the implied rate - the one that the lessor used when calculating lease payments. Of course, in most cases it is not known to the tenant. Then you need to use interest rate bank loan, the payment schedule for which would correspond to the terms of the leasing agreement.
If the discounted value of the minimum lease payments is less than the fair price of the property, it must be increased to the latter value. All initial expenses of the tenant will be included in the amount at which he will accept the property for accounting.
The rules for recording finance leases in Russian accounting are different. Thus, if, according to the terms of the agreement, the lessee must accept the leased asset on its balance sheet, it will take it into account at the nominal amount of lease payments. That is, RAS does not take into account the time value of money.
In IFRS, the lessee shows its obligations to the lessor also at nominal value. But at the same time, he introduces an additional account in which he reflects the amount of future interest expenses. As a result, the discounted amount of debt will appear on the balance sheet.
2. Cost accounting. According to IFRS rules, the lessee's expenses mainly consist of two components: depreciation of the leased asset and interest expense.
In RAS, parties to a contract may, by agreement, apply accelerated depreciation of leased property (Article 31 of the Leasing Law).
According to IFRS, the lessee must depreciate the leased assets according to the rules that it applies to similar property. However, he cannot establish accelerated depreciation.
Interest expense for the use of leased property is reported using the effective interest method 1, similar to interest on the company's long-term liabilities. But in Russian accounting, interest expenses are not shown. Rental costs will consist either exclusively of lease payments (when accounting for property with the lessor), or from accrued depreciation (when accounting for the lessee).

1 – For more information about the effective interest rate, see No. 1 of the “Consultant” for 2006 (page 60).

...and the landlord

1. Initial recognition. If the lessor is not the manufacturer or dealer of the leased property, then when the asset is transferred to it, it must recognize a “receivable” on its balance sheet. The rules for its assessment are the same as for the tenant's debt: the total amount must be shown at nominal value. It is also necessary to enter an additional account to account for future interest income. As a result, the balance sheet will contain the current value of the debt. These are the requirements of IFRS. Concerning Russian accounting, then accounts receivable are reflected in full amount, that is, at nominal value.
2. Revenue recognition. Under international accounting standards, both the lessor and the lessee must record interest income over the entire term of the lease agreement. Moreover, they need to do this systematically and rationally. The constant rate of return is distributed among the lessor's net outstanding investment in the lease. The latter represent the difference between the nominal amount of debt and the amount of interest income not yet received. Thus, we are talking about the same effective interest rate method.
According to RAS rules, the lessor can reflect income in two ways. The choice between them depends on which of the partners accounts for the property on their balance sheet - the lessor or the lessee.
In the first case, the lessor’s income will be the amount of lease payments under the agreement. In the second, the difference between the nominal amount of all payments and the actual value of the transferred asset must be attributed to deferred income. In the income statement, this amount is reflected based on the terms of the lease agreement, and not evenly, as in IFRS.
3. Accounting for trade leases. There is another important difference between IFRS and RAS. It is associated with the so-called trade lease. They talk about it when the seller of the property acts as a lessor. That is, when renting is essentially an alternative to purchasing an asset. In such a situation, IFRS requires the lessor to divide its income into two types:

1. profit or loss that is equivalent to the proceeds less expenses from the sale of the leased asset at market prices taking into account all discounts - on the date of reflection in the accounting of rental property;
2. interest income – throughout the entire lease term.

Unlike IFRS, according to Russian legislation, a product manufacturer cannot simultaneously be a lessor. In addition, RAS does not oblige dealers to record the financial result of a lease agreement as of the date of its conclusion. That is, the accounting procedure in in this case will not differ from the generally accepted one.
Thus, Russian rules Accounting for finance leases differs significantly from international ones. Primarily due to the fact that the accounting procedure is largely determined by the characteristics of a particular transaction, that is, the terms of the leasing agreement. When accounting for this type of lease under IFRS, it is necessary to observe the principle of priority of the economic content of the agreement over its form. Differences in accounting for finance leases are also due to the fact that RAS does not have the concept of time value of money. Therefore, domestic companies cannot distribute interest income and lease expenses evenly based on the effective interest rate.

Table
Differences in lease accounting according to Russian and international standards

	The procedure for recording
Rental classification	Based on the terms of the contract	Depends on the economic content of the transaction
Accounting for leased property on the balance sheet of the lessor or lessee	Specified in the contract	The lessee always accounts for the asset on its balance sheet
Accounting for the transfer of property from a tenant	Based on the nominal amount of lease payments on the balance sheet or on an off-balance sheet account	Based on the lesser of fair value or discounted value of lease payments.
Reflection of expenses by the tenant	Costs consist of either lease payments or depreciation of the asset (allowed accelerated depreciation)	Property is depreciated at general rules. Interest expense is recorded based on the effective interest rate
Accounting for the transfer of property from the lessor	If an asset is written off from the balance sheet, receivables are recorded at their nominal amount	Shows the discounted value of receivables
Reflection of income by the lessor	In accordance with the terms of the agreement	Based on effective interest rate
Trade lease accounting	There is no concept of trade lease	In addition to interest income, profit or loss from the sale of an asset is taken into account.

Lease relationships are a very common practice in business. When entering into them, you should remember that the lease must be carried out correctly according to accounting. Many operations, including this one, are regulated international standards IFRS (IAS). In domestic accounting there is no separate chart of accounts for accounting for leases, however, operating leases are accounted for in the same way in RAS and IFRS. How exactly this happens and how an operating lease differs from a financial lease will be described in more detail below.

What is an operating lease

At the end of 2016, the Ministry of Finance of the Russian Federation issued Order No. 258n, which approved the Federal Accounting Standard “Lease”, intended for public sector enterprises. This standard states that lease relationships can take the form of operating or finance leases.

Lease relations- this is the acquisition or giving for temporary operation or temporary possession of any material assets. In this case, both parties receive certain advantages:

• the lessor retains ownership of the material asset or can sell it at the end of the lease period, while he is guaranteed additional cash receipts;
• the lessee does not spend funds on the purchase of property, but can use it;
• tax bonuses for both parties.

FOR YOUR INFORMATION! Entry into a rental relationship is sealed by the conclusion of a property lease agreement (the so-called “lease agreement”) or an agreement for gratuitous use.

The IFRS standard divides leases into operating and non-operating (finance) leases. Operating lease– transfer of property with a relatively short period of temporary use or possession, which is significantly less than the period useful operation(the same ratio in terms of cost: rent much less than the real price of the transferred material value). Payments under the lease agreement will not cover the total value of the assets received; they represent solely a payment for the use of the thing, but not for the thing itself.

ON A NOTE! When the term “lease” is used in its usual everyday meaning, they most often mean operating leases - they are more common than financial leases. An example would be, for example, renting an office in a business center or renting out an apartment by an individual.

The difference between an operating lease and a financial lease

Finance lease– another type of temporary transfer of assets, when payments for rent and period of use practically “merge” with the general lifetime of material assets and their real value. How is it different from the operating room?

1. Risks and benefits. This is the main difference between this form of lease agreement and an operating lease: with a financial lease, the recipient accepts, along with the property, all the benefits of its ownership, but along with them all the risks. In the operating room, the advantages of ownership and the risks associated with it are not fully transferred.
2. Renting or leasing? Another difference relates to the accounting for leases. Operating leases are reflected equally in both IFRS and RAS. Financial is considered only in clause 13 of the GHS “Lease”, and in RAS the term “leasing” is used instead. Leasing must be taken into account in accounting according to the regulations of the relevant law (“On Leasing”), which differs from the IAS Standard.
3. Meaning is more important than form. This principle, which defines international standardization, is very clearly illustrated by the classification rental relations: the form of the drawn up agreement is not as important in qualifying the lease as the economic substance of this operation. It is the ratio of risks and benefits that will be the priority in determining the type of lease - financial or operating.

REFERENCE! All features of a finance lease, basic and additional, are given in paragraph 11, paragraph 17 of the IFRS Standard.

Reflection of operating leases in accounting

From an accounting point of view, an operating lease is a regular sale of services with the only difference - the prepayment for the lease is recorded as a separate line in the balance sheet, which is called differently by the parties:

• for the lessor it is “Deferred income”;
• for the lease recipient – ​​“Deferred expenses”.

IMPORTANT! When accounting for operating leases, all payments must be accrued evenly, that is, received in the same amounts throughout the entire lease term. In this case, the payment schedule adopted in the text of the agreement does not matter: an operating lease guarantees an even receipt of benefits.

What to record in a tenant's accounting

The party taking property under operating lease must reflect the following items in accounting:

• on the new balance sheet account 0 111 40 000 “Right to use property” – acquired rights to operate the asset (amount of lease payments for the entire lease period);
• on the balance sheet account 0 302 24 000 “Calculations for rent for the use of property” - money intended as rent;
• on the new balance sheet account 0 104 40 450 “Depreciation of the right to use property” - depreciation of the right to temporary use of the asset is written off (monthly in the amount of rental payments);
• on the corresponding accounts analytical accounting(0 302 00 000 “Liabilities”, 0 109 00 000 “Costs for the manufacture of finished products, performance of work, services”, 0 401 20 000 “Expenditures of the current financial year”) - costs of contingent payments that arise on the date of their accrual ( this usually happens monthly). Contingent payments are expenses that arise during the use of property and are not fixed in the text of the contract; their amounts are determined along the way.

NOTE!“The right to use property” is a new, independent accounting object, reflected as a non-financial asset. Its residual value can be reversed in the direction of reducing lease payments payable if the lease amount was paid ahead of schedule, while additional profit, of course, is not reflected.

Features of accounting with the lessor

Accounting interprets leasing as the acquisition of the right to use for a specified time.

The party transferring its property for possession or operation for the period specified in the contract has the following objects in its accounting:

• on the balance sheet account 0 205 21 000 “Settlements with payers of income from operating leases” - receiving money from the user of the asset;
• on the corresponding off-balance sheet accounts 25 “Property transferred for paid use (rent)”, 26 “Property transferred for free use” - internal movements of assets without indicating disposal;
• on the balance sheet account 0 401 40 121 “Deferred income from operating leases” - expected profits from the payment of lease obligations for the entire lease term;
• on balance sheet accounts 0 205 35 000 “Calculations of income on conditional lease payments”, 0 401 10 135 “Income of the current financial year on conditional lease payments” - calculation of income on conditional lease payments.

As you can see, the assets given away are not written off from the balance sheet, but remain on the books; changes are visible only in analytical accounting.

ATTENTION! If a lease is paid off early, the balance of the provisioned proceeds in the account is reversed to reduce the lease receivable of the asset recipient without recording a loss.

Tax accounting of operating leases

Any lease transactions are subject to taxation at 18%, which in this case is calculated on the amount of income from operating leases. The amount is calculated based on the financial result recorded in the accounting department.

NOTE! VAT is not charged on the transfer of the asset itself, but only on lease payments. At the time of transfer of the asset, the parties have no obligations to pay VAT.

Not accrued because the asset is not debited from the lessor's balance sheet and does not increase the lessee's income. As for rental payments, these are already financial income (expenses), therefore they fall into the base of this tax among “other income/expenses”.

The terms operating and finance leases refer to the accounting treatment of leases. The international standard IAS 17 “Rent” is responsible for this accounting. Russian accounting still does not have a separate accounting standard regulating lease accounting. At the same time, accounting for operating leases in RAS is no different from accounting for operating leases in IFRS. And instead of the term financial lease, RAS uses the term “leasing”, the accounting of which is prescribed in the law on leasing. And here accounting under IFRS and RAS differs significantly.

This article will discuss lease accounting in accordance with international accounting standards.

Lease accounting

IAS 17 defines a lease as follows: "Renting is A contract under which the lessor gives the lessee the right to use an asset for an agreed period of time in exchange for a payment or series of payments.” That is, if someone has an asset that they do not need, and someone else would like to use this asset without buying it, then they can enter into a lease agreement. In this case, both parties to the transaction receive benefits:

• The lessor receives cash flow while retaining either ownership of the asset or the right to sell it at the end of the lease term.
• the lessee gets the opportunity to use the asset without purchasing it;
• both parties receive certain tax benefits;

The IFRS Committee is currently preparing for release new standard on the lease, which is expected to be finalized in 2015. But, as always happens, understanding the new must be based on understanding what happened in the past.

What is the rental classification based on?

IFRS 17 Leases distinguishes between two types of leases: finance leases and operating leases. Rental classification is based on the distribution of risks and benefits associated with the ownership of an asset between the lessor and the lessee.

• A lease is classified as a finance lease if it transfers substantially all the risks and rewards of ownership of the asset.
• A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards of ownership of the asset.

For those preparing to take the Dipifr exam, it is very important to remember the answer to this question. Imagine if IFRS 17 appeared as the third question in the exam, meaning Paul Robins had to come up with some questions on lease theory. The most obvious option in this case is to ask “what is the rental classification based on?” And although many people know by heart the signs of a financial lease (which are discussed below), few will figure out how to answer this generally simple question. Therefore once again:

The classification of leases adopted in this standard is based on the distribution risks and benefits associated with the ownership of the asset that is the subject of the lease between the lessor and the lessee. Risks include the possibility of losses due to downtime or technological obsolescence, or fluctuations in profitability due to changing economic conditions. Benefits are associated with the expectation of profit from operations over the economic life of the asset and income from appreciation or disposal of residual value [IFRS 17, paragraph 7]

IFRS 17 is always used as an example when explaining the principle priority of the economic essence of the operation over its legal form because whether a lease is classified as a finance lease or an operating lease depends more on the content of the transaction than on the form of the agreement.

By the way, in the previous edition of the IFRS Framework, the predominance of substance over form was considered as one of the aspects of information reliability. Now, “the predominance of essence over form” is not considered as a separate aspect of reliable representation, since it is considered redundant. IN new edition Conceptual framework A reliable representation in itself means that financial information describes the essence of an economic event, and not its legal form. In other words, if the information is reliable, then this implies a representation of the essence of the phenomenon, and not its form (in fact, this has become an axiom).

The standard describes examples of circumstances that, individually or in the aggregate, would typically lead to a lease being classified as a finance lease (IFRS 17 paragraph 10):

1. the lease agreement provides for the transfer of ownership of the asset to the lessee at the end of the lease term;

2. the lessee has the right to purchase the asset at a price that is expected to be so much less than fair value at the date the right is exercised that, at the commencement date of the lease, the right can reasonably be expected to be exercised;

3. the lease term extends over a significant portion of the economic life of the asset, even in the absence of a transfer of ownership;

4. on the date of commencement of the lease relationship, the present value of the minimum lease payments is practically equal to the fair value of the asset that is the subject of the lease;

5. The leased assets are of such a specialized nature that only the lessee can use them without significant modification.

These circumstances describe situations in which the economic benefits of an asset pass to the lessee. Of course, the main signs of a financial lease are the third and fourth from this list. If the lessee will use the asset throughout its life, if it pays the lessor the fair value of the asset in periodic rental payments, then it is clear that virtually all the risks and rewards have transferred to the lessee. The remaining points are additional signs that exclude the possibility of influencing the classification of a lease through a change in the terms of the contract: if at the end of the lease period there is a buyout of the asset at a reduced price or a transfer of ownership without any payments at the end of the lease period is provided, then this also indicates that that the lessee will effectively control all the economic benefits of the asset.

In addition, the IFRS 17 standard in paragraph 11 stipulates three more additional features finance lease:

Other factors that, individually or in the aggregate, may also lead to a lease being classified as a finance lease:

a) if the tenant has the right to early termination of the lease agreement, the lessor’s losses associated with the termination of the agreement shall be borne by the tenant;

b) other income or losses from fluctuations in the fair estimate of residual value are accrued to the lessee (for example, in the form of a rent discount equal to the majority of the proceeds from sale at the end of the lease term); And

c) the tenant has the opportunity to extend the lease for another term at a rent level significantly lower than the market one.

The examples and signs given in paragraphs 10 and 11 are not always conclusive. If other factors clearly indicate that substantially all the risks and rewards of ownership of the asset have not been transferred, the lease is classified as an operating lease. For example, this might happen:

• if the asset is transferred into ownership at the end of the lease term in exchange for a variable payment equal to the fair value of the asset at that time, or
• where there is a contingent rent which does not transfer substantially all of such risks and rewards to the lessee.

Operating lease

Operating leases are accounted for as normal sales of services. The only difference from the sale of services is the name of the line in the balance sheet, indicating the prepayment of rent: “Deferred expenses” for the tenant and “Deferred income” for the lessor.

Under an operating lease, lease payments (excluding costs of purchasing services such as insurance and Maintenance) are recognized as an expense allocated on a straight-line basis unless another systematic approach more adequately reflects the timing of the user's benefits, even if payments are not made on that basis.

The essence of the previous paragraph is that no matter what payment schedule is specified in the lease agreement, if the lease is operating, then expenses should be accrued to the profit and loss account evenly, that is, they should be the same throughout the entire lease term of the asset. Knowledge of this rule is precisely tested in the Dipifr exam in tasks on operating leases.

Most clear example operating lease is the lease of office space in business centers or space in shopping centers. For individual This is the rental of an apartment that you own, which is a good addition to the family budget.

Finance lease

A finance lease is a special type of lease agreement. In fact, a finance lease is the acquisition of an asset with financing for this acquisition by the lessor. If the lessor were not willing to finance the sale of the asset, the buyer would have to apply to the bank for a loan and use the funds received to purchase the required asset.

In a finance lease, the lessee receives all the economic benefits of the asset and the lessor earns financial income during the lease term. If we throw away conventions and look at the situation globally, there are some similarities between a bank and a landlord. The bank rents out for use cash and receives a reward for it. The lessor rents out an asset he does not need for use and also receives a certain remuneration, spread over time. Both capitalize time: the more time passes, the more income they will receive.

Calculation of finance lease liability

Example. 1

On January 1, 2010, Alpha Company leased equipment worth 100,000 rubles. The useful life of the equipment is 5 years. Annual lease payments equal to 23,100 payable over 5 years at the end of the year. The rate implied in the lease agreement is 5% per annum. The present value of 1 dollar at 5% per annum for 5 years is 4.3295.

Exercise. Calculate the amounts to be reported in the statement of comprehensive income (profit or loss) and the statement of financial position (balance sheet) for the year ended 31 December 2010 in respect of the lease of equipment.

Solution.

1) First wiring: Let's reflect the asset and liability for the finance lease on the balance sheet.

Dr Fixed asset Kt Finance lease liability – 100,000

At the initial moment, the value of the asset and the value of the liability are equal. Moreover, the lesser of two amounts is taken: a) the fair value of the asset and b) the present value of the minimum lease payments. In our case:

• 23.100*4.3295=100.011 - present value of lease payments.
• 100,000 – fair value of equipment

Therefore, we take 100,000.

2) For simplicity, we assume that the reporting period and the rental payment period are equal to one year. For the year that has passed since the start of the lease, you need to accrue interest expenses for this period. This will result in an increase in the lease liability: 100,000*5% = 5,000.

Second wiring: Dr Finance costs Kr Finance lease liability – 5,000

3) At the end of the year it will be produced rental payment in the amount of 23,100 (stated in the contract). This payment will reduce the amount of the lease liability.

Third wiring: Dr Finance lease liability Kr Cash – 23,100

4) Since the leased asset is used by the lessee in the process of generating revenue, and its consumption must be proportionately charged to expenses. The depreciation period is the lesser of the useful life of the asset and the term of the finance lease. In our case, it is necessary to calculate depreciation on the fixed asset per year, in this case 100,000/5 years = 20,000 per year.

Fourth wiring: Dt Depreciation of fixed assets Kt Accumulated depreciation – 20,000

It is best to present the calculation of the amount of the finance lease liability in tabular form. When paying lease payments at the end of the year, the table looks like this:

Table 1

The amount 81,900=100,000+5,000-23,100 represents the balance of the finance lease liability at the end of the first year of the lease. The opening balance at the end of the year becomes the opening balance for the next period and is transferred to the first column of the table. The full table for 5 years of lease is as follows:

Table 2

The finance lease liability is divided into short-term and long-term parts. To isolate the short-term part of the finance lease liability, you need to calculate its value at the end next year. The amount of finance lease liability at the end of next year, as can be seen from the table, is 62.895. This is the long-term commitment at the end of the first year of the lease. The difference between 81,900 and 62,895 equals the short-term portion of the finance lease liability at the end of the first year - 19,005.

The lessor's accounting will (ideally) be a mirror image of the lessee's accounting. The transaction amounts will be the same. Only the names of the items and their symbol will change: the lessor’s “Finance Lease Liability” will be called “Finance Lease Receivable” or “Investment in Finance Lease”; the OSD will reflect financial income, not expenses.

Table 3

If (and in practice this is exactly what happens) the payment period is less than a year, then the calculation principle will remain the same. Let's say lease payments are due at the end of every six months. The table in this case will be exactly the same as for annual payments. But to calculate interest, you will need to use a semi-annual rate, and the liability figure relating to the end of the reporting period (the first year of the lease) will be on the second line of the table.

For monthly rental payments, you will need to build a table in which each line will correspond to 1 month, and the interest rate will be monthly.

Where can I get the interest rate to calculate income/expenses for finance lease?

In the case of finance leases, determining the rate to charge income/expenses is a simpler task than estimating the discount rate for a specific company. If the rate is not specified in the lease agreement, then it can be calculated based on the rental payment schedule, which must be present in the agreement. And then it's a matter of mathematics. All that needs to be done is to determine the internal rate of return (IRR) of all cash flows under the contract, i.e. all rental payments. How to do this is described in a separate article on this site. You can use it.

How is a lease tested in the Dipifr exam?

In the Dipifra exam, Paul Robins most often uses operating leases in his problems. The main point that he tests is the uniformity of accrual of rental expenses. As a complication, he adds to the condition of such tasks a payment at the beginning of the lease term, either from the tenant (deposit) or from the landlord (incentive). These lump sum payments must be taken into account when calculating lease expense for the year: added to or subtracted from the total operating lease payments.

Finance leases are tested in the Dipifr exam in real estate lease problems. When leasing real estate, land and buildings that are elements of the leased asset must be treated separately for lease classification purposes.

Land plots, as a rule, have an unlimited economic life. Therefore, if it is not expected that by the end of the lease the land will become the property of the lessee, then in this case the lease land plot is considered an operating lease because the lessee does not assume all the risks and rewards of owning the land. Buildings, as an element of leased property, are classified as finance or operating leases depending on the terms of the agreement.

Typical financial lease problem for the Dipifr exam

On April 1, 2011, Alpha began leasing the property. The lease term is 40 years. At the end of the lease period, the property will be returned to the lessor.

The market value of the lease rights at the beginning of the lease term was estimated at 15,000 million for the building and 12,000 million for the land. Annual lease payments were set at $1,800 million due at the end of the year, with the first payment due on March 31, 2012. The annual interest rate implied in the lease agreement is 6%. The estimated useful life of the building as of 1 April 2011 was 40 years. The cumulative present value of $1 paid at the end of each of the 40 annual periods at a 6% rate is $15,046.

Exercise. Explain, accompanied by calculations, the accounting treatment of this transaction in the reporting for the year ended March 31, 2012. Calculations should be made of the amounts recognized in the statement of comprehensive income and the statement of financial position.

Please note that the solution to this problem includes three points: 1) explanations, 2) calculations, 3) extracts from the statements. More details about what the answer to a situational problem should contain are written in the article.

Solution.

1. Land and buildings must be considered separately for rental classification purposes.
2. The lease of a land plot is operational, since the land plot has an unlimited service life, and at the end of the lease period it must be returned to the lessor.
3. The amount of the lease payment must be divided in proportion to the fair value of the lease rights, i.e. 1,800 must be divided in the ratio 5:4 (15,000:12,000). This means that 800 applies to renting a land plot, and 1,000 to renting a building.
4. The lease of the building is a finance lease because a) the lease term is the same as the useful life of the building and b) the present value of the lease payments 1,000 * 15,046 = 15,056 approximately equals the fair value of the lease rights to the building 15,000.
5. The building will be reflected at the lower of 15,046 and 15,000, i.e. in the amount of 15,000. Depreciation for the period will be equal to 15,000 * 1/40 = 375

1. Long-term finance lease liability equals 14.794, short-term – 14.900 – 14.794 = 106

GPP as of 03/31/12:

• building under a finance lease agreement: 14,625 = 15,000 – 375
• long-term finance lease liability – 14,794
• short-term finance lease liability - 106 (14,900 - 14,794)

OSD for the year ended 03/31/12:

• OS wear – 375 = 15,000/40 years
• operating lease expenses - 800
• financial expenses for rent – ​​900

The last time such a task was submitted to the exam was in June 2012, that is, already 3 years ago. Therefore, it is very important to be prepared for the appearance of this type of task on Dipifra in June 2015.

Leaseback

The term “leaseback” means that the company that owns the asset sells the asset, receives cash on the sale, and then leases the same asset. Leasebacks can be either operating or finance, depending on what type of lease will be used by the seller and buyer of the asset after the sale transaction. This topic will be discussed in more detail in one of the following publications. Here I will simply give an analysis of how examiner Deepifr uses leaseback when composing problems.

Paul Robins tested problems with operating leasebacks twice: in December 2013, with the sale of an asset below fair value, and in December 2010, with a sale above fair value. Be sure to pay attention to the accounting treatment of the differences between the selling price of an asset and its fair value in both cases.

Sale and finance leaseback was used as a note to issue #2 in March and December 2009. The second question tested the preparation of a balance sheet and income statement from a balance sheet, and is now missing from the new exam format. Since then, Paul Robins has never returned to the topic of finance leasebacks. Whether such a question will appear in the consolidation notes, I do not know. We have been waiting for this for a long time, and we are already tired of waiting.