ACCA FR · Guided practice (Show me how)
Chapter 12: Leases (IFRS 16)
Sale and leaseback at fair value
Sale and leaseback. Pear acquired an item of machinery at a cost of $750,000 on 1 January 20X4. The machine had an estimated useful life of 10 years and no residual value.
On 1 January 20X6, the machine was sold at its fair value of $675,000 and leased back over 8 years. The present value of future lease payments has been calculated at $625,000. The transfer is a sale.
Calculate the gain on the sale and leaseback to be recognised by Pear in the year ended 31 December 20X6. (Work in $, to the nearest $.)
The machine and the total gain
Calculate Pear's machine carrying amount and total disposal gain at 1 January 20X6.
Right-of-use asset and the gain recognised
Calculate Pear's right-of-use asset and the gain recognised on the rights transferred at 1 January 20X6.
Opening this exercise…