yes per indas 116

salelease back lease

Sale-leaseback Example IFRS and ASPE Company A sells a machine to Company B for its fair value of $ 2,000,000 on January 1,2018 Company A immediately leases the machine back for 5 years The useful life of the machine is 7 years The implicit rate is 7% and the incremental borrowing rate is 6% (assume both rates are known to lessee) The machine was recorded on Company A's books at $ 1,400,000 The residual value at the end of 5 years is expected to be $ 400,000 and is not guaranteed Sale-leaseback Example IFRS and ASPE Required: Assuming the annual payments are at the beginning of the period are what is the lease payment Company B would charge Company A? Using IFRS give the initial journal entries for Company B Using ASPE give the initial journal entries for Company B Using IFRS give the initial journal entries for Company A Using ASPE give the initial journal entries for Company A Glesor