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Hello! Help me figure out the problem, please. Do I understand correctly that this task is for sale and leaseback? Based on the methodology described in IFRS 16, I have lease obligations (USD 7,023,581.54), and a right-of-use asset (USD 6,020,212.75). I don’t understand if this is possible. Why conduct an unprofitable operation? What will be the answer in the task?
Thank you very much in advance!On 1 January 20X4, Stark entered into a sale and leaseback of its property. When it was sold, the asset had a carrying amount of $6 million and a remaining life of 10 years. Stark sold the asset for $7 million and leased it back on a 10 year lease, paying $1 million on 31 December each year. The lease carried an implicit interest rate of 7%.
What is the total expense that should be recorded in the statement of profit or loss for the year ended 31 December 20X4?
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