alleryStart learning →An operating leaseback at fair value gives a profit that is
ADeferred over the lease term
BAmortised over useful life
CRecognised immediately
DCredited to reserves
Answer & Solution
Correct answer: C. Recognised immediately
With price and rentals at fair value it is in effect a normal sale, so profit or loss is recognised immediately.
Keep practising AS 19 Leases
Browse all AS 19 Leases questions for CA Inter, or explore more Accounting topics.
Related questions
Leaving a finance lease off the lessee's balance sheet understates obligations and distortFor a lessee, the amount of a residual value guarantee is theA lessor on finance leases also discloses accumulated provision forWhich must a lessor disclose for finance leases?In a finance leaseback, the carrying amount is written down only if there isLeaseback below fair value, loss offset by cheap rentals, isAsset sold at fair value Rs 6 lakh, carrying amount Rs 8 lakh, operating leaseback. Loss rOperating leaseback above fair value: the excess is