To clarify a basic accounting issue. Let's say there's a hire purchase contract with three parties. The buyer (the end customer), the seller (the car dealer) and the finance company who provides the loan.
The question is accounting from the perspective of the finance company. If the finance company reports under FRS 102 (although I'd imagine this would also be the same under IFRS), is the finance company a lessor?
Even though the finance company didn't originally own the underlying asset, they effective buy the car from the dealer and then lease it out to the customer?
And given that a lease is where the lessor conveys a right to control the asset over a specified period of time, would this make the finance company a lessor as it conveys the right through providing the HP contract and finance etc?
and therefore the finance company would account for the HP contract as a finance lease (as lessor) under FRS 102 Section 20 for leases?