(AS) 19
(AS) 19
(AS) 19
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380 <strong>AS</strong> <strong>19</strong> (issued 2001)<br />
Appendix<br />
Sale and Leaseback Transactions that Result in Operating<br />
Leases<br />
The appendix is illustrative only and does not form part of the<br />
accounting standard. The purpose of this appendix is to illustrate the<br />
application of the accounting standard.<br />
A sale and leaseback transaction that results in an operating lease may give<br />
rise to profit or a loss, the determination and treatment of which depends on<br />
the leased asset’s carrying amount, fair value and selling price. The<br />
following table shows the requirements of the accounting standard in various<br />
circumstances.<br />
Sale price<br />
established at<br />
fair value<br />
(paragraph 50)<br />
Carrying<br />
amount<br />
equal to<br />
fair value<br />
Carrying<br />
amount less<br />
than fair value<br />
Profit No profit Recognise profit<br />
immediately<br />
Carrying<br />
amount<br />
above fair<br />
value<br />
Not applicable<br />
Loss No loss Not applicable Recognise loss<br />
immediately<br />
Sale price below<br />
fair value<br />
(paragraph 50)<br />
Profit No profit Recognise profit<br />
immediately<br />
Loss not<br />
compensated by<br />
future lease<br />
payments at below<br />
market price<br />
Loss compensated<br />
by future lease<br />
payments at below<br />
market price<br />
Recognise<br />
loss<br />
immediately<br />
Defer and<br />
amortise loss<br />
Recognise loss<br />
immediately<br />
Defer and<br />
amortise loss<br />
No profit<br />
(note 1)<br />
(note 1)<br />
(note 1)
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