Which of the Following Is True Regarding the Deferral of Sale

question 49

Multiple Choice

Which of the following is true regarding the deferral of sale profits on a sale-leaseback under IAS 17,"Accounting for Leases?

• A) Any profit on a sale-leaseback resulting in an operating lease is deferred and recognized over the subsequent lease period,whereas any loss is recognized immediately.
• B) Both profits and losses on a sale followed by an operating lease leaseback are recognized immediately if the transaction is established at fair value.
• C) Profit from the sale should be deferred and amortized in proportion to the amortization of the leased asset if a capital lease results from the sale-leaseback.
• D) Profit from the sale should be amortized in proportion to the rental payments it an operating lease results from the sale-leaseback.

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