Sale + Leaseback Flashcards
1
Q
When the seller sells an asset to the buyer and the buyer leases to the seller, when do we recognise this as a sale?
A
When the performance obligation has been satisfied and the buyer now has substantially all the benefit ( Risks and rewards)
2
Q
When the seller sells it, what are the double entry?
A
Dr Cash, Cr Asset Cr Gains/Loss in I/S
3
Q
When the buyer leases it ( After the sale has been made), what is the double entry?
A
Dr Right to use asset, Cr L.L Cr Gain/Loss I/S
4
Q
What is the double entry when there is no sale?
A
Recognise this as an asset
5
Q
What is the double entry for a normal lease?
A
Dr Cash, Cr Financial Liability
