NBV of buildings to be refurbished by the NHSScotland body

£3m

NBV of buildings to be refurbished by the private sector

£8m

NBV of land leased to the private sector

£5m

Primary period

25 years

Deferred asset

£8m

(NBV of buildings to be refurbished by the private sector)

£m

(1)

Debit: OCS disposal account

8

Credit: Fixed assets - buildings

8

Disposal of the headlease

(2)

Debit: Deferred asset

8

Credit: OCS disposal account

8

Recognition of the benefit of entering into the lease

At the end of year 1:

(3)

Debit: OCS

0.32

Credit: Deferred asset

0.32

Write-off of the deferred asset over 25 years

(4)

The deferred asset is a net relevant asset for the purposes of calculating the cost of capital.