FRS 17

Formal

A document outlining Accounting and Reporting standards to be followed by companies. This covers the requirement to report Capital Leases and Operating Leases in a manner that reflects the true nature of the contract and does not distort the financial position.

Real-world Example

A company leases delivery vans on a long-term contract that behaves like ownership. Under FRS 17-style rules, it must list those vans as an asset (and the lease as a liability) on its balance sheet rather than treating it as a simple off-balance-sheet rental.