Incentives for lessees to enter into lease agreements are spread evenly over the lease term, even if the payments are not made on such a basis, and are deductible from rental revenue. The lease term is the non-cancellable period of the lease together with any further term for which the tenant has the option to continue the lease, where, at the inception of the lease, the directors are reasonably certain that the tenant will exercise that option.
Income arising from expenses recharged to tenants is recognized in the period in which the expenses are incurred.