Sale and leaseback transaction

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December 11, 2017 at 8:47 am #422485
vivekmenon123
Member
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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
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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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