Real Estate
Sale-and-Leaseback Transaction — Gain
Selling an office building and immediately leasing it back, recording the gain under IFRS 16.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Cash / Bank | Asset (+) | 5,000,000.00 | - |
| Right-of-Use Asset | Asset (+) | 400,000.00 | - |
| Accumulated Depreciation | Contra-Asset (-) | 500,000.00 | - |
| Building (Cost) | Asset (-) | - | 3,000,000.00 |
| Lease Liability | Liability (+) | - | 500,000.00 |
| Gain on Sale-Leaseback | Revenue (+) | - | 2,400,000.00 |
💡 Accountant's Note
Under IFRS 16, a sale-leaseback produces a partial gain. The seller-lessee only recognizes the gain relating to the rights transferred to the buyer-lessor, and retains a ROU asset for the rights it keeps.
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