Page 145 - IC26 LIFE INSURANCE FINANCE

 Any profit or loss should be recognized immediately, except that, if the loss is

compensated by future lease payments at below market price

 If the loss is compensated by future lease payments at below market price, the profit or

loss should be deferred and amortised in proportion to the lease payments.

If the sale price is above fair value

 The excess over fair value should be deferred and amortised over the period for which

the asset is expected to be used.

Further, if the fair value at the time of a sale and leaseback transaction is less than the carrying

amount of the asset, a loss equal to the amount of the difference between the carrying amount

and fair value should be recognized immediately.

Disclosure Requirements:

In the books of lessee in case of financial lease

 Assets acquired under finance lease

 Reconciliation between the total of minimum lease payments and their present value as

at the balance sheet date with following segregation not later than one year later than

five years

 Contingent rents recognized as expense

 Future minimum sublease payments expected to be received under non-cancellable

subleases

 General description of the leasing arrangements

 In the books of lessor in case of financial lease

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