• Register
Search Questions / Answers

Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. You can register with your email or with facebook login in few seconds

Get AccountantAnswer App


What are the IFRS implications. The company pays no rent to company B and assumes the accrued rental expense equals the expected dividend income
in IAS 16 - Property, Plant and Equipment by

1 Answer

0 votes
Is the transaction between Company A & B is Sale and lease back or lease arrangement?

We have to first determine if the arrangement contains lease or not. From the question it appears that we can treat the same as lease as for which it is impracticable to separate lease payment liability as the company A assumes the accrued rent expense same as dividend income.

Considering an operating lease, we can treat all payments under arrangement as lease payment that do not include payments for non lease elements. Terms for variable lease payment must be disclosed with other disclosure requirements of lease arrangement  in financial statement.
by Level 4 Member (7.6k points)