Page 100 - SBR Integrated Workbook STUDENT S18-J19
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Chapter 8
Example 1
Identifying a lease
Saga has signed a contract with a supplier. The supplier will transport a
specified quantity of Saga’s goods, on set days, using a specific type of lorry.
The timetable and quantity of goods specified in the contact are equivalent to
Saga having the use of eight lorries for four years. The supplier provides the
lorries and lorry drivers as part of the contract. The contract states the nature
and quantity of the goods to be transported, and the type of lorry to be used to
transport the goods. The supplier has a pool of 30 lorries that meet the
contract specification, and is allowed to use any of these. These lorries can
also be used to transport the goods of other customers. The lorries are stored
at the supplier’s premises when not being used to transport goods.
The directors of Saga require advice as to whether the contract contains
a lease.
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