The International Accounting Standards Board (IASB) and the Financial Accounting Board (FASB) have begun a joint project to agree a worldwide unified approach to the classification of operating leases. A comment for statement is due in 2008. Any changes are unlikely to be implemented prior to 2010 though these changes will likely remove the "all or nothing" approach to the balance sheet currently employed. ( Ongoing details www.asb.org.uk)

Irrespective of the balance sheet treatment operating leases offer a cost effective alternative should the lessor be able to offer better asset management and resale skills than you could provide yourself. The operating lease calculator highlights the residual value the lessor would place on the asset enabling you to assess the lessors management skills over your own. An alternative to assessing if you could achieve the re-sale price is the probability of using the asset for one, month, quarter or year more than you originally contracted for and the cost of such an extension under the operating and finance leases.