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Hi,
when faced with these types of questions, will we be asked to prepare the F/S from the point of view of the lessee or could it be both i.e the lessee and the lessor. May thanks.
sorry just to add:
Is it more likely that there will be a sale and leaseback arrangement where it is a finance lease as oppsoed to a sale and leaseback arrangement (operating lease).
Your help is much appreciated.Sale and leaseback would more likely be an operating lease. More likely to answer from the point of view of a lessee but be prepared for a lessor question with a “net investment in the lease” calculation and guaranteed and unguaranteed residual amounts
thank for your reply. yes i suppose you are right (with the sale and leaseback arrangement being an operating lease). this is why it is a current issue right? i.e with S and LB arrangements as an operating lease companies can hide assets and (big) liabilities from their SFP, they just expense it in the I/S.
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