Operating lease arrangements are commonly seen in the shipping industry especially for the charter-hire businesses. Under the current International, Hong Kong and US lease accounting standards, which have been around for many years, operating lease expenses paid by lessees are recorded in their financial statements when they are incurred. Operating lease assets are never recorded by lessees on the grounds that their risks and rewards are retained by the lessors. This accounting approach will be changed soon and the change is going to be substantial.
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To rent or to own? Article addressing the development of lease accounting (pdf file, 278KB) for your reference.
