Pavel Anikin, Audit Director of CJSC RUFAUDIT, member of the RCA, certified practicing accountant (CA P)

When accounting for rent both in 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. Respectively, rental relations

under such agreements they 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.

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 participants in 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).

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 lease payments, an entry is made in accounting for the amount rent

. 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 the interest rate of a 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.

2. 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 financial 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, which reflects the amount of future interest expenses. As a result, the discounted amount of debt will appear on the balance sheet.

Cost accounting.

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. Initial recognition....and the landlord 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

2. full amount, that is, at nominal value.

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.

3. 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.

• 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;
• 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.

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 lower 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	Accounting for trade leases	There is no concept of trade lease

Today we will talk about what an operating lease is, as this information will be useful to all novice investors.

Statistics show that more than 30% of fixed assets of domestic enterprises are used on the basis of lease agreements.

Modern economic literature distinguishes four main varieties:

1. Financial.
2. Operating room.
3. Combined.
4. Returnable.

The term “operating lease” usually means the transfer of assets to third parties for their use. Key Feature operating lease is that the owner of the assets continues to maintain them after transferring them to third parties.

One of the first companies to widely practice operating leases was IBM. This organization began leasing office equipment and computers to various companies.

Assets that require regular maintenance during operation are optimally suited for operating lease. Maintenance. Among similar assets special attention deserves automobile transport, various types of engineering equipment, etc.

When renting out assets for operating lease, their owner assumes obligations for them service. It should be noted that the rental payments initially include the price of periodic maintenance of the assets that are leased.

Operating lease. Peculiarities

Among key features Operating leases require special attention to the incomplete depreciation of leased assets.

This is due to the fact that objects are leased for a significantly shorter period of time than the service life established by the manufacturer. For this reason, rental payments are not able to cover full price assets that are leased.

To cover the resulting costs, the landlord can use one of several available methods. The most common method involves renewing the lease or leasing the asset to another lessee. Alternatively, the owner can simply sell the asset after the lease ends.

A standard operating lease agreement provides that the lessee has the right to terminate it early. It is the presence of this clause that distinguishes an operating lease agreement from others.

Also, when drawing up an operating lease agreement in mandatory risks that may be caused by asset obsolescence or downtime due to changes in current market conditions are taken into account.

All risks that arise when concluding an operating lease agreement are borne by the lessee along with the equipment that he leases. This is exactly what it consists of key difference between operating and finance leases.

Reflection of operating leases in accounting

When preparing an accounting report, payments for the described type of lease are recorded as deferred expenses for the lessee, as well as deferred income for the owner of the asset.

According to the current legislation, lease payments are expenses, which allows them to be written off. In accounting, lease payments are written off on a straight-line basis.

A striking example of an operating lease is the rental of office space in various types shopping centers. In this case the owner shopping center undertakes to maintain the leased premises in proper technical condition.

Another example of such a lease is the lease of existing residential real estate.

It should be remembered that a fairly common type of operating lease is a leaseback. This term usually means a situation where the owner sells an existing asset. The seller then leases the sold asset from the buyer.

The IFRS standard will be edited very soon. After this standard is amended, the term operating lease will completely disappear from domestic legislation.

It should be noted that an operating lease differs from a financial lease only in the terms of the agreement concluded.

I hope this material has helped you understand what an operating lease is, as well as what the main features of this term are.

If you are interested in investing in different kinds commercial real estate for the purpose of its subsequent rental, then you will need knowledge about the features of operating leases. Renting out existing property for operating lease is quite effective method receiving income.

Currently, up to 30% of fixed assets are purchased using lease agreements. There are the following types of lease: operating, return, combined.

Operating (service) lease involves transfer for use. Important characteristic operating lease, What distinguishes it from other varieties is the continuation and maintenance of the asset by the transferring party.

One of the pioneers of such operations was IBM. IBM leased computers, duplicating and office equipment.

Other properties that require financing and regular maintenance are ideal for operating leases, such as, road equipment, mechanical engineering equipment, etc.

In such a lease, the lessor is responsible for maintenance. Lease payments usually include the cost of maintenance.

Characteristic feature operating lease is incomplete depreciation of the asset.

The rental property is rented out for a significantly shorter period than the established service. In this case, rental payments do not cover full cost rental property.

There are several options for the landlord different ways covering theirs. It is possible to renew the lease agreement, transfer the leased property for use to another tenant, or sell it.

An important clause in lease agreements is the cancellation agreement, which gives the tenant the right to terminate the contract early. The presence of this clause allows you to unambiguously classify the lease as operating.

The international standard IAS 17 “Lease” introduces the classification of leases. The type of lease is determined based on the distribution of benefits between both the lessee and the lessor.

Benefits arise from expected transactions over the life of the asset and from appreciation in value.

Risks are caused by the possibility of downtime, obsolescence of the rental item and changes in the economic conditions of its operation, leading to changes in market conditions.

Operating lease occurs if substantially all the risks and rewards are transferred to the lessee along with the leased asset. This is a fundamental difference from a finance lease or installment sale.

Operating lease accounting

Operating lease payments are reflected as sales of services in the lines “period expenses” for the lessee and “deferred income” for the lessor, indicating prepayment.

Lease payments, with the exception of maintenance costs, etc., are recognized as expenses subject to write-off. Write-offs are made on a straight-line basis.

One type of operating lease can be a leaseback. The term means that the owner of the asset sells the asset and receives for it. After the transaction is completed, the seller leases the sold asset.

Depending on the terms under which the asset is leased, the lease is classified by type as either operating or finance.

Currently being prepared new edition IFRS standard, in which the concept of operating lease will disappear.

The Ministry of Finance of Russia has prepared guidelines for the application of the transitional provisions of the GHS “Fixed Assets” regarding the issues of reflection in accounting on the corresponding balance sheet accounts of real estate assets.

During your annual inventory, be sure to look at lease agreements and free use for all objects received by your institution without being assigned the right of operational management. Now such objects are listed in your accounting behind the balance in account 01 ().

Select all leases and free use agreements that may qualify as non-operating (financial) leases. To do this, check that the criteria listed in . It is not necessary that all criteria be met. The signs given, even individually, are the basis for classifying the property as an object of financial lease.

Give priority to finance lease criteria. Even if some signs of an operating lease are met, but at the same time there are signs of a financial lease, classify the property as a financial lease.

Despite the rather complex wording of the standard, the essence of the differences between financial and operating leases is not difficult to understand. Let's look at the problem using examples.

Example 1

Remaining term beneficial use The property is 20 years old and is leased for the entire 20 years. Moreover, according to the agreement, the tenant must pay rental payments in the amount of 4.9 million rubles. and receives the right to purchase the property.

In this case, the lease term is comparable to the remaining period of use - one of the signs of a financial lease is present. In addition, the term of the lease agreement is important, but not the only criterion for determining the type of lease. Another sign of a financial lease is the comparability of the total amount of lease payments with the fair value of the object (). If a building can be purchased on the market for approximately 5 million rubles, and according to the lease agreement you will have to pay a total of 4.9 million rubles, we can talk about a financial lease. In such a situation, the tenant, as it were, buys the property.

Essentially, in our example everything beneficial features the object under the agreement will be transferred to the lessee, therefore this property as an object of financial lease must be reflected by the lessee in account 101 (). But the lessor, when renting out the property for financial lease, transferred all its useful properties. In the future, he will no longer be able to use the useful potential of the object or receive benefits from its use - the object does not correspond to the concept of “Asset” (). Therefore, the lessor must write it off the balance sheet ().

Example 2

If, with a remaining useful life of 20 years, the object is leased for only 3 years, this is a sign of an operating lease. During an operating lease, the lessor continues to account for the leased asset in account 101 (), and the lessee will have to account for the right of use in a special account (). For this purpose, it is planned to introduce a new account 111 “Rights to use property” into the chart of accounts from January 1, 2018.

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.

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.

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.

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.

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.

5. The property is such that only the tenant may use it without significant modification.

It is necessary to find out which of the participants in 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.

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).

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, property is measured 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 the interest rate of a 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 financial 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, which reflects the amount of future interest expenses. As a result, the discounted amount of debt will appear on the balance sheet.
2. All initial expenses of the tenant will be included in the amount at which he will accept the property for 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 for 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 solely of lease payments (when accounting for property with the lessor) or accrued depreciation (if accounting for the lessee).

1 – More about effective interest rate see No. 1 “Consultant” for 2006 (p. 60).

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. 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. As for Russian accounting, accounts receivable are reflected in full amount, that is, at their nominal value.
2. full amount 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. 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. 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 income less expenses from the sale of the leased asset at market prices, taking into account all discounts - on the date of recording the lease of the 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 this case will not differ from the generally accepted one.
Thus, Russian rules for accounting for finance leases differ 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 lower 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 (accelerated depreciation is allowed)	Property is depreciated according to 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
Accounting for trade leases	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.