1 edition of Accounting for sales with leasebacks found in the catalog.
Microfiche. [S.l. : s.n., 1982?]. 1 microfiche : negative.
|Statement||Financial Accounting Standards Board|
|Publishers||Financial Accounting Standards Board|
|The Physical Object|
|Pagination||xvi, 76 p. :|
|Number of Pages||50|
|2||Statement of financial accounting standards (Financial Accounting Standards Board) -- no. 28.|
|3||Public record (Financial Accounting Standards Board)|
nodata File Size: 9MB.
A sale-leaseback transaction that does not qualify for sales recognition would be considered a financing arrangement. Obviously, the present value of the return on the asset must exceed the cost to purchase. Obligations: The parties must approve and commit Accounting for sales with leasebacks their obligations under the contract. In fact, an SLB makes the most sense when property values are high and lease rates are low. IAS 17 covered the accounting for a sale and leaseback transaction in considerable detail but only from the perspective of the seller-lessee.
For larger transactions such as real estate sale-leasebacks, creative minds will again examine the repercussions of the accounting and simply consider them in the way they enter these transactions. Under the previous guidance, Topic 840, application of its extensive provisions and related disclosures were difficult to implement for many entities.
Frequently, sale-leaseback assets are commercial real estate properties such as multifamily properties, office buildings, retail properties, and more. The seller-lessee can keep a short-term lease off the balance sheet. WHAT CONSTITUTES A SUCCESSFUL SALE AND LEASEBACK?
Under this circumstance, Paragraph 842- 40- 30- 6b requires that the book value of the asset cannot exceed the carrying value of the liability at the earlier of the lease termination date or the date at which control over the asset is transferred to the buyer- lessor.
Then, the leaseback operating lease becomes a finance lease for the seller-lessee and a sales-type lease for the buyer-lessor.
The lease meets one of ABCD and both of EF 2. The underlying asset is of such a specialized nature that it is expected to have no alternative use at the end of the lease term without significant modifications. The parties to the contract have approved and are committed to perform their respective obligations. Except for short-term leases, it must recognize the ROU asset and lease liability on its balance sheet. Record the purchase of property 3. Although capital and credit markets have largely recovered from the near collapse that occurred in the fall of 2008, credit is still tight for many companies.a right to repurchase the assetno sale has occurred because the buyer-lessor has not obtained control of the asset.
The seller-lessee must subtract any lease incentives from the ROU asset value.
The most common users of sale-leasebacks are builders or companies with high-cost fixed assets.
The key provision of the revenue recognition standard for sales treatment is that there must be commercial substance.
In contrast however some transactions of assets other than real estate or equipment integral to real estate will be considered a FAILED sale and leaseback under ASC 842.
Use: The lessee can directly use the asset in the ways it wants.
leaseback is classified as a finance lease, or• Obviously, a cash-strapped seller-lessee will find this arrangement especially useful.