SCHEDULES
SCHEDULE 14Leases: changes to accounting standards etc
PART 2Long funding leases
The lease payments test: interest rate implicit in lease
9
1
Section 70O (the lease payments test) is amended as follows.
2
In subsection (4), for paragraph (b) substitute—
b
if a rate cannot be determined in accordance with paragraph (a), the interest rate implicit in the lease is taken to be 1% above LIBOR.
3
After that subsection insert—
5
For this purpose—
a
LIBOR means the London interbank offered rate at the relevant time for deposits for a term of 12 months in the applicable currency,
b
the relevant time is the inception of the lease, and
c
the applicable currency is the currency in which payments under the lease are payable.