If a Sale and Leaseback Transaction Results in a Finance

question 4

Multiple Choice

If a sale and leaseback transaction results in a finance lease, AASB 117 Leases, provides the following accounting treatment for any excess of sales proceeds over the carrying amount:

• A) recognise directly in retained earnings of the seller-lessee
• B) immediately recognise as income by the seller-lessee
• C) defer and amortise over the lease term
• D) include in the capitalised amount of the leased asset.

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Definitions:

Emotive Style

A communication approach that emphasizes expressing feelings and emotions to connect with others.

Reflective Style

A way of thinking and processing information that involves careful consideration of past experiences and actions to inform future decisions.

Supportive Style

A communication approach that emphasizes understanding, empathy, and encouragement.

Thoughts

Mental processes or ideas that arise within the mind of an individual, encompassing beliefs, opinions, and reflections.