Page 141 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx

Leases

Sales and leaseback

3.1 What is a sales and leaseback arrangement?

(1) JS sells asset to AF
for cash
JS Ltd AF ltd
(2) AF immediately
leases the asset

back to JS

The accounting treatment for sales and leaseback depends on the type of lease
involved.

133