Accounting for sale and leaseback transactions

Multiple-choice questions: In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again

  1. What is the key determinant of the accounting treatment of a sale and leaseback?

  2. Which, if any, of the following statements is correct? Statement 1 - The sale and leaseback with variable payments issue only exists where the transaction does not qualify as a sale per IFRS 15 Statement 2 - The ROU asset under a sale and leaseback is recorded at the proportion of the proceeds remaining with the seller-lessee

  3. Which of the following represents the new accounting treatment for lessors under IFRS 16?

  4. Which, if any, of the following statements regarding IFRS 16 for lessees is correct? Statement 1 - Leases less than 12 months can be expensed on a straight-line basis, or Statement 2 - Lessees can choose to expense items in either depreciation or finance costs

  5. Which of these represents the new accounting treatment for lessees under IFRS 16?