Which of the following is false about a sale and leaseback arrangement?
A)The lessee obtains the use of an asset not previously owned.
B)The lessee sells an asset to a financial institution, which then leases the asset back to the lessee.
C)The lessor purchases the asset.
D)The lessor is permitted to deduct CCA on the leased asset for income tax purposes.

Question

Quizplus · Accepted Answer

In a sale and leaseback arrangement, the lessee already owns the asset before selling it to the lessor and leasing it back, contrary to option A which suggests the lessee obtains use of an asset not previously owned.

Which of the Following Is False About a Sale and Leaseback