Under IAS 17, in a sale-leaseback transaction, how must the initial owner treat any gain on a finance lease?

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Quizplus · Accepted Answer

Under IAS 17, in a sale-leaseback transaction, any gain on a finance lease must be deferred and recognized as income over the lease term. This is because the sale-leaseback transaction involves transfer of the rights to use the leased asset to another party, while the initial owner retains the obligation to make lease payments. In this scenario, the gain on the sale of the asset should be deferred and amortized over the lease term. Therefore, option A is the correct choice.

Under IAS 17, in a Sale-Leaseback Transaction, How Must the Initial