A lease is not a long funding lease if it is a ‘short lease’.

Any lease entered into on or after 1 January 2019 with a term of seven years or less is a short lease.

Before that date a lease with a term of five years or less was a short lease. A lease with a term of more than five years but no more than seven years was also a short lease if three conditions were met but these rules, described below, no longer apply.

Firstly, the lease must be correctly treated as a finance lease under generally-accepted accounting practice.

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