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Sale and leaseback

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Sale and leaseback

  • This topic has 1 reply, 2 voices, and was last updated 4 years ago by P2-D2.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • April 18, 2021 at 11:04 am #618079
    ronal123
    Member
    • Topics: 2
    • Replies: 0
    • ☆

    Hi!

    Thank you for the great work!
    Could you elaborate the first scenario in https://www.youtube.com/watch?v=xyfGqkW81Pc&list=PLETfu1oU9uLx_K-b1ydAEXimj70-HSQZr&index=15

    (no sale being made)
    You state that the liability will be the full amount at amortized cost, should we do some sort of discounting? Could you post the entries?

    April 21, 2021 at 9:05 pm #618446
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7163
    • ☆☆☆☆☆

    Hi,

    Glad you appreciate the work, thank you!

    If there is no sale then the proceeds are effectively a loan (DR Bank CR Loan). The loan is a financial liability at amortised cost and subject to the usual treatment.

    There is no discounting as that is already factored in to the proceeds received, where the provider of finance will have looked at the repayments and used an appropriate discount rate to work out their present value, thus being the proceeds they provide to you.

    Thanks

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