BLM20220 - Defining long funding leases: the three tests: the finance lease test: consolidated accounts
»Ê¹ÚÌåÓýapp finance lease test looks at the accounting treatment of the lease in the accounts of the lessor and of any person connected with the lessor. For this purpose, ‘accountsâ€� includes group accounts.
Connected person takes the definition in CTA10/S1122.
Without this rule it would be easy for a lessor to treat the lease as an operating lease and for the group to treat it as a finance lease, thus side-stepping the finance lease test.