Sale and lease back with variable payments

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Anuradha13
Posts: 15
Joined: 28 Apr 2022, 11:47

Sale and lease back with variable payments

Post by Anuradha13 »

Hi Everyone,

Company is entering into sale and leaseback transaction where the lease payments are dependent on CPI.

There was a committee's decision in case of sale and leaseback transaction with variable lease payments depending on revenue of lessee that entity needs to estimated the expected future lease payments and then calculate the lease liability.

https://home.kpmg/xx/en/home/insights/2 ... frs16.html

Do we have to estimate the future lease payments if the variable lease payments depend on Index?


Thanks,
Anuradha
Leo
Posts: 544
Joined: 05 Apr 2020, 22:31

Re: Sale and lease back with variable payments

Post by Leo »

I would do nothing, and book the change (recalculate everything) only when it occurs.
Anuradha13
Posts: 15
Joined: 28 Apr 2022, 11:47

Re: Sale and lease back with variable payments

Post by Anuradha13 »

Thanks Leo
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