ECONOMIC CONSEQUENCE ISSUES IN THE EMERGENCE OF SSAP 21: “Accounting for leases and hire purchase contracts” Available to Purchase

From the proposals for a system of capitalising finance leases included in ED 18 in 1976 to the issue of SSAP 21 in 1984 has been a long haul. Much time has been given to a variety of technical problems, particularly the difficulties of defining a lessor's net cash investment in a lease. However the major delaying factor has undoubtedly been the debate over whether capitalisation of finance leases should be required. For the first time the Accounting Standards Committee (ASC) has explicitly laid out, and called for comment on, “economic consequence” issues. This article is concerned with exploring the nature of these issues and the way the ASC has responded to them.