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Greek Accounting Standards – Law 4308/2014

The adoption by the Parliament of Law 4308/14 and of article 18 in particular introduces after 31.12.2014 changes to the recognition of financial leasing contracts by lessees.

More specifically:

a) An asset acquired by the entity (lessee) through financial leasing shall be recognised as an asset of that entity at the acquisition cost which would have accrued if the asset in question had been purchased, with the simultaneous recognition of a corresponding liability to the lessor entity (financial leasing liability). Subsequently, such assets shall be accounted for in accordance with the provisions of Law 4308/2014 on the corresponding privately-owned assets. The financial leasing liability shall be handled as a loan, with the amount of the lease broken down into the repayment instalment (which reduces the loan amount) and the corresponding interest amount (recognised as financial expense).

b) The sale of assets which are then leased back through financial leasing (Sale & Lease Back) shall be accounted for by the seller as secured borrowing.
The proceeds from the sale shall be recognised as a liability which is decreased through the repayment instalments paid, while the corresponding interest shall be recognised as financial expense.
The assets sold shall continue to be recognised as assets in the balance sheet.