Hi All,
We buy the asset (purchase price 400000), paid in installment of 4000 monthly. Also we have a right to sell the asset back to the original seller at the price (400000-installments paid) at the end of 12 months and Original seller has the obligation to buy.
if we initially decide to sell - is this transaction considered as lease and recognise Right of use asset and lease liability ?
If we initially decide to retain the asset - can we capitalise the asset and show trade payables or it is financial liability if the payment is 4000 monthly for 100 months?
Thanks,
Anuradha