CERTYNEX IFRS ACADEMY

Lusinor transfers a warehouse to an investor for 850,000 and leases it back at below-market lease payments; the IFRS 15 analysis concludes that there is a sale. The fair value of the warehouse, readily determinable, is 1,000,000, and Lusinor uses the difference in fair values as the more readily determinable basis. How should the difference of 150,000 be treated?

As a loss on disposal recognised immediately in profit or loss.

As additional financing provided by the investor to Lusinor.

As a prepayment of lease payments, the sale proceeds being brought to fair value.

No treatment: the price agreed between the parties is used as sale proceeds as it stands.