Sale and leaseback transaction

Dear Mike,

I am confused by the answer given in my revision question bank for the question.

Please see the extract from the question:
“In December 2017, a leisure center complex was sold for proceeds equivalent to its FV of $35 million, the related assets have been derecongnised from the SoFP and a profit on disposal of $8 million is included in the SoPL for the year. The remaining useful life of the leisure center complex was 21 years at the date of disposal.

The assets was leased back to use in ongoing operations, paying a yearly rental based on market interest rate +2%. Rental payments are accrued for on an accrual basis. At the end of the 20-year lease arrangement, the assets can be repurchased for its market value at that time.”

My answer is that we must use IAS 17 for sale and leaseback transactions under finance leases:
– do not recognize disposal
– depreciate asset
– recognize $8 million as deferred income and amortize is over the lease term
– recognize Dr Cash Cr Lease payables
– no accruals for lease payments (to PL).
Dr PPE 35
Dr SoPL 8
Cr Fin lease payable 35
Cr Deferred income 8

The answer in my book refers to IFRS 15, IFRS 9 and IFRS 16.
Transaction should be treated as financing arrangement and financial liability must be recognized in accordance with IFRS 9. Nothing is said about deferred income and it’s amortization.
Adjustments to FS:
Dr PPE 35
Dr SoPL 8
Cr Fin liability 35
(Again nothing about deferred income).

On the one hand there is nothing critically different, but on the other hand Fin liability and Fin lease payables is slightly different things and how to be with deferred income… and why it is nothing said about IAS 17 whereas it is directly describes sale and leaseback operations? New standards do not replace old standards as I understand.

Please help me!
Thank you very much in advance!