Advanced lease transactions
Area 2: Technical Accounting and Reporting (35-45%)
Your Progress
0 of 54 questions attempted
Topics
- Sale-leaseback transactions
- Lease modifications and reassessments
Lessons
Study Frameworks
Does This Sale-Leaseback Qualify as a Sale?
Does the transfer of the asset meet the criteria for a sale under ASC 606 (control transferred to buyer-lessor)?
Yes
Does the leaseback give the seller-lessee substantially all of the remaining use of the asset (e.g., finance lease covering entire useful life)?
Yes
Failed sale-leaseback — account as a financing arrangement (keep asset on books, record financial liability)
No
Successful sale-leaseback — derecognize asset, recognize ROU asset for leaseback, and recognize gain/loss only on the portion of rights transferred
No
Failed sale — account as a financing arrangement (asset stays on seller-lessee's books, cash received is a financial liability)