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Chapter 6

3.3 Sale and operating leaseback

As per IAS 17 Leases, the treatment of an operating leaseback depends on the
selling price agreed.

Sale and
operating
leaseback

Sale = FV Sale > FV Sale < FV

 Derecognise  Derecognise  Derecognise
asset asset asset

 Record gain  Record gain  Record gain
or loss in P/L or loss up to
or loss in P/L
FV in P/L immediately
 Defer excess Unless
above FV
compensated with
over lease cheaper lease
term
rentals, then
 Defer loss

over lease
term

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