the story unfolding, page-46

cmonaussie and oakeyflat

My apologies if you are both practicing taxation accountants and therefore expert in the area of leases/capital expenditure. (I did check for your profiles)

The taxation laws and accounting doctrines/conventions in this area quite complex.

If OP are interested they may care to read this well written explanation of the issues involved. (or the full article at
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/AccPrimer/lease.htm )

OPERATING VERSUS CAPITAL LEASES

Firms often choose to lease long-term assets rather than buy them for a variety of reasons - the tax benefits are greater to the lessor than the lessees, leases offer more flexibility in terms of adjusting to changes in technology and capacity needs. Lease payments create the same kind of obligation that interest payments on debt create, and have to be viewed in a similar light. If a firm is allowed to lease a significant portion of its assets and keep it off its financial statements, a perusal of the statements will give a very misleading view of the company's financial strength. Consequently, accounting rules have been devised to force firms to reveal the extent of their lease obligations on their books............