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Sir when an a sale and operating leaseback arrangement takes place and the FV is more than CV,what do we do?
And if Fv is less than Cv,we impair it right?Sales proceeds=fv recognize profit/loss immediately
Sales proceeds < fv recognize profit/ loss immediately
Sales proceeds > fv defer and amortize over lease term
“If Fv is less than Cv,we impair it right?” Yes, recognise the loss immediately
“FV is more than CV,what do we do?” It depends how much you sell it for.
Look at Opentuition course notes, page 91 and 92
doesnt this depend on the type of lease?
For instance, for an operating which is a genuine sale there will be a profit on disposal while for finance lease there isnt any.
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