1. In 20X5 Leasy Co sells and leases back a manufacturing asset by way of a lease. The transfer does not qualify as a sale in accordance with IFRS 15. The sale proceeds were in excess of fair value and exceeded carrying amount of the asset. Which of the following statements is true?

• The sale proceeds are recognized as a financial liability
• The excess of sale proceeds over fair value are recognized as a financial liability
• A right of use asset is recognized
• The asset is derecognized and a gain or loss on disposal arises