sale and lease back

Revenue includes $50 million for an item of plant sold at fair value on 1 October 20X2. The plant had a book value of $40 million at the date of its sale, which was charged to cost of sales. On the same date, Tourmalet entered into an agreement to lease back the plant for the next five years (being the estimated remaining life of the plant) at a cost of $14 million per annum payable annually in arrears. An arrangement of this type is deemed to have a financing cost of 12% per annum. No depreciation has been charged on the item of plant in the current year. : Ans Step 1: Correct incorrect treatment of disposal proceeds Asset already removed from trial balance figures so need to remove the incorrect entries from revenue/cost of sales and calculate the profit on disposal (to be spread over the five year lease term). $000 $000 Dr Revenue 50,000 Cr Cost of sales 40,000 Cr Profit on disposal (1 year) 2,000 Cr Deferred income (4 years) 8,000 i am not able to understand the above treatment . its a sale and a finance leaseback.As per rule we have to derecognize the asset . But how ? cant the sale be recorded ?