34.1 Accounting policy
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
34.2 Operating lease commitments
The future aggregate minimum lease payments under non-cancellable operating leases are payable as follows:
|Not later than one year||8.4||9.5|
|Later than one year and not later than five years||17.6||18.8|
|Later than five years||6.4||10.1|
|Total operating lease commitments||32.4||38.4|
The Group's property, plant and equipment assets are either purchased outright or held under lease contracts. Where the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the Group, the asset is capitalised in the Group balance sheet and the corresponding liability to the lessor is recognised as a finance lease obligation. Where all the risks and rewards of ownership are not transferred to the Group, the lease is classified as an operating lease and neither the asset nor the corresponding liability to the lessor is recognised in the Group balance sheet. The net book value of the Group's property, plant and equipment assets held under finance lease contracts at 31 December 2013 and 31 December 2012 was not material.
The cost incurred by the Group in the year in respect of assets held under operating leases, all of which was charged within trading profit, amounted to £14.4m (2012: £24.2m).