On or about 27 November 2020, the International Accounting Standards Board (IASB) has proposed to amend IFRS 16 Leases by specifying how a company measures the lease liability in a sale and leaseback transaction.
Sale and leaseback transactions are transactions for which a company sells an asset and leases that same asset back from the new owner.
The proposed amendment seeks to improve the sale and leaseback requirements already in IFRS 16 by providing greater clarity for the company selling and leasing back an asset both at the date of the transaction and subsequently. Sale and leaseback transactions are transactions where a company sells and leases that same asset from the new owner.
The proposed amendment only applies to leases arising in a sale and leaseback transaction. The exposure draft ED/2020/4 Lease liability in a sale and leaseback is open for public consultation until 29 March 2021.
Source: IFRS [media release], 27 November 2020, accessed 3 December 2020.