IFRS 16 makes significant changes to sale and leaseback accounting. A sale and leaseback transaction is one where an entity (the seller-lessee) transfers an asset to another entity (the buyer-lessor) for consideration and leases that asset back from the buyer-lessor.
In order the transfer is qualified as a sale, it has to follow IFRS 15, the 5-step model, otherwise it is just a financing transaction under IFRS 9.
A sale and leaseback transaction is a popular way for entities to secure long-term financing from substantial property, plant and equipment assets such as land and buildings.
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Check out simulation of IFRS 16: Consumer Price Index (CPI) in Hamilton Engine HERE
Check out simulation of IFRS 16: Bargain Purchase Option in Hamilton Engine HERE
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