The hotel group Solvène sells a hotel to a property company for 4,000,000, a price equal to the fair value of the hotel, whose carrying amount is 2,400,000. The attached IFRS 15 analysis concludes that there is a sale. Solvène leases the hotel back for 5 years for an annual payment of 200,000 paid at the end of each year; the discount rate used is 5 % and the corresponding rounded annuity factor is 4.33 units. Case assumption: the proportion of the right of use retained is the ratio of the present value of the lease payments to the fair value of the hotel. Determine the lease liability, the right-of-use asset and the gain recognised on the disposal.
- Sale price (equal to fair value)
- 4,000,000
- Carrying amount of the hotel
- 2,400,000
- Annual payment at the end of each year
- 200,000
- Leaseback term
- 5
- Discount rate
- 5 %
- Rounded annuity factor
- 4.33