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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Sep 16 examiner report
Hello Sir,
“The second question that caused difficulty was the treatment of profit on a sale and leaseback arrangement. The profit is the difference between the sale proceeds and the carrying amount (at the time of the sale and leaseback) and this is spread over the remainder of the asset’s useful life
or, if shorter, the remaining lease term.”
what means the profit is spread over the remainder of the assets useful life? can you give an example?
Thank you.
Hi,
You don’t need to worry about this as it is the treatment under the old IAS 17 rules and has been replaced by IFRS 16.
Thanks