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Reporting by the lessor: sales-type lease Session Unit 8:
versus direct financing lease, p. 288 31. Non-Current (Long-Term) Liabilities
US GAAP recognised 2 types Sales-type lease (normal case) Direct financing lease
of capital/finance lease
US GAAP -Definition Present value (PV) of the lease PV of the lease payments = ACV
payments > Asset Carrying Value (ACV)
IFRS No distinction recognised
Lessor (manufacturer/dealer) Lessor (providing finance function
At inception/initial • Debit lease receivable = PV of lease payments mainly):
tanties
recognition! (usually selling price) • Credit Carrying value in balance sheet
• Credits sales = PV of lease payments (selling price) • Debit lease receivable = PV of lease
• Debit COGS = Carrying value of the asset payments (usually selling price)
• Credit inventory No GP recognised!
(difference is GP)
During lease team Lessor (manufacturer/dealer) Lessor (manufacturer/dealer)
• Debit cash • Debit cash
• Credit lease receivable = PV of lease • Credit lease receivable = PV of lease
payments (Principal -and Interest) payments (Principal and Interest)
(interest recognised as income) (interest recognised as income)
