Dear Sir,
In the answer for Example 7 part i) where in substance no sale has taken place and we initially recognise a Financial Liability amount equal to the sales proceeds of $10m, what about the interest component in the subsequent measurements? Lease term is for 10 years and lease payment is $1M per annum, by using amortised cost accounting, by the end of the 10 years the Financial Liability would not be Nil due to interest.
Thanks in advance for your guidance.
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Question on Sale and Leaseback - Example 7
1y ago#1I take your point. :).
The learning point is that the PPE is not derecognised. But I need to change the wording in the question slightly. I'll do it when the lecture is next re-recorded.
Thank you for feeding this back.
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