Page 113 - SBR Integrated Workbook STUDENT S18-J19
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Leases
Sale and leaseback
4.1 Is the transfer a ‘sale’?
If an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor)
and then leases it back, both entities must assess whether the transfer should be
accounted for, in substance, as a sale.
Entities must apply IFRS 15 Revenue from Contracts with Customers to decide
whether a performance obligation has been satisfied.
4.2 Accounting treatment
Transfer is not a sale Transfer is a sale
Seller-lessee Continue to recognise asset Derecognise the asset.
Recognise a financial liability Recognise a right-of-use
equal to proceeds received. asset as the proportion of the
previous carrying amount that
relates to the rights retained.
Recognise a lease liability.
A profit or loss on disposal will
arise.
Buyer-lessor Do not recognise the asset Account for the asset
purchase.
Recognise a financial asset Account for the lease by
equal to transfer proceeds. applying lessor accounting
requirements.
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