Chapter 12 - Sale and Leaseback

Seller becomes ----> Seller-Lessee

Purchases becomes ----> Purchaser-Lessor
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Leaseback as an OPERATING LEASE
if Sale Price = Fair Value
- any gain or loss shall be recognized immediately
if Sale Price < Fair Value
- any gain or loss shall be recognized immediately
NOTE: if the lss is c!"ensated b# future lease rental at
bel$ !arket %alue& LOSS IS 'EFERRE' and A(ORTI)E'
if Sale Price * Fair Value
- excess of Fair Value %er +arr#in, A!unt is RE+OGNI)E'
I((E'IATEL-
- excess of Sale Price %er Fair Value is 'EFERRE' and
A(ORTI)E'
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Leaseback as FINAN+E LEASE
- any GAIN on sale or E.+ESS OF SALE PRI+E OVER +ARR-ING
A(O/NT is 'EFERRE' AN' A(ORTI)E' OVER T0E LEASE TER(
- any LOSS on sale IS RE+OGNI)E' I((E'IATEL-