The methods are some of the problems of a lease transaction that require you to make an analysis and provide justification based on MFRS 16 Lease.

X sold the optical cable assets to Y for RM2.5 million (the fair value of the assets was RM1.5 million and the carrying value was RM1.3 million). At the same time, X has also signed a lease contract to acquire the right of use on the optical cable assets for 5 years. The transaction has met the sales criteria based on MFRS15 Contract from Customers. X is of the view that they earned a profit on sale of RM1 million immediately without sacrificing any economic benefit of the asset.