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Sale and leaseback transaction

This topic has 1 reply, 2 voices, and was last updated 7 years ago by P2-D2.

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December 11, 2017 at 8:47 am #422485
vivekmenon123
Member
- Topics: 2
- Replies: 4
Hello,
Apart from financing purposes is there any other motive for a sale and leaseback transaction? Because if that is the only motive then the substance of the transaction would never satisfy IFRS 16 and would only be accounted for as a loan.
Hoping to hear from you soon. Thanks in advance.
Kind Regards
December 12, 2017 at 9:15 pm #422788
P2-D2
Keymaster
- Topics: 4
- Replies: 7082
Hi,
It is predominantly used as a source of finance but if it has been sold on a very long leasehold then effectively it has been sold in substance, and would meet the criteria of IFRS 16.
Thanks
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