01.07.2021 | History

1 edition of Accounting for sales with leasebacks found in the catalog.

Accounting for sales with leasebacks

an amendment of FASB statement no. 13

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Published by Administrator in Financial Accounting Standards Board

  • United States
    • Subjects:
    • Financial Accounting Standards Board

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      • Microfiche. [S.l. : s.n., 1982?]. 1 microfiche : negative.

        StatementFinancial Accounting Standards Board
        PublishersFinancial Accounting Standards Board
        LC Classifications1982
        The Physical Object
        Paginationxvi, 76 p. :
        Number of Pages50
        ID Numbers
        ISBN 10nodata
        2Statement of financial accounting standards (Financial Accounting Standards Board) -- no. 28.
        3Public record (Financial Accounting Standards Board)

        nodata File Size: 9MB.

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Accounting for sales with leasebacks by Financial Accounting Standards Board Download PDF EPUB FB2

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.

Summary of Statement No. 28

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.