Sale And Leasebacks

Question 1

ASC 842-40-55-24

Recognizing gains in sale leaseback transactions

Answer 1

In sale/leaseback transactions, one has to observe if sale is at FV or off-market prices. If FV and carrying value are equal, seller/lessor recognizes no gain. Amount of sale price is excess of FV is recognized as additional financing to sell or/lessor