If a sale and leaseback transaction results in a finance lease,any excess of sales proceeds over the carrying amount shall:
A)be deferred but not amortised over the lease term
B)be immediately recognised as an expense by a seller- lessee
C)not be immediately recognised as income by a seller- lessee
D)be immediately recognised as income by a seller- lessee

Question

Quizplus · Accepted Answer

According to IFRS 16, if a sale and leaseback transaction results in a finance lease, any excess of sales proceeds over the carrying amount of the asset sold should not be immediately recognized as income by the seller-lessee. Instead, it should be deferred and recognized as income over the lease term. Therefore, choice C is the best answer.

If a Sale and Leaseback Transaction Results in a Finance