- This topic has 5 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
hi mike
i am struggling with a topic that is sale n lease back where lease is classified as an operating lease
after knowing the difference between CV and FV the loss should be recognised immediately then we just have to compare FV and SP??I’ve responded to this on the “recent comments” post
Please, make your mind up – in fact the correct page to post is “Ask the Tutor” but I still need to know the sale price
If FV < CV, recognize loss immediately (not applicable here)
If SP > FV, defer gain, the gain is effectively a loan from the buyer (not applicable here)
If SP = FV, profit or loss (SP – CV) recognise immediately (not applicable here)
If SP < FV, as in both your scenaria, recognise profit or (in both your scenaria) loss immediately UNLESS the low selling price is because lower than market rate interest has been negotiated in which case defer / spread the loss
Ok?
- You must be logged in to reply to this topic.