Hestan transfers a warehouse to a property fund for 1,500,000, equal to the fair value of the warehouse, and leases it back; according to the IFRS 15 analysis provided, the transfer is a sale. The carrying amount of the warehouse is 600,000. The present value of the leaseback payments, payable at the end of each year, is 450,000. Case assumption: the proportion of the right of use retained is measured as the ratio of that present value to the fair value of the warehouse. Compute the right-of-use asset and the gain recognised on the disposal.
- Sale price (equal to fair value)
- 1,500,000
- Carrying amount of the warehouse
- 600,000
- Present value of the leaseback payments
- 450,000