page 95 Bombardier Inc. Annual Report 2003-04 BC – Significant accounting policies Financing revenues Financing revenues are comprised of the following: a) Interest income b) Finance lease income c) Operating lease income Interest income related to finance receivables is recognized on an accrual basis, computed on the average daily finance receivables  outstanding balance.  Lease income related to finance leases is recognized over the terms of the applicable leases in a manner that produces a constant rate of return on the lease investment. Operating lease income is recognized over the term of the lease on a straight-line basis. Assets leased under terms that transfer substantially all of the benefits and risks of ownership to customers are accounted for as direct financing leases and included in finance receivables. BC defers the direct origination costs of finance receivables. These costs are amortized on a yield basis over the expected term of the  finance receivables. Deferred origination costs Lease receivables