Leaseback

[Leo]

Hi,

An operation whereby an entity sells its property to entity B, and entity B lease it back to entity A is a leaseback operation. However, if entity A sells to entity B, and entity B sublease it to entity C, and entity C lease it back to entity A, is that a leaseback operation? Or, just a sell followed by leases and subleases?

[JakobLavrod]

Out of interest here, what is the functional purpose of entity C?

[Marek Muc]

I'd apply this guidance: https://ifrscommunity.com/knowledge-bas ... -contracts

[Marek Muc]

Out of interest here, what is the functional purpose of entity C?

probably to sidestep the sale and leaseback accounting rules

[JakobLavrod]

I think ICAEW:s ethics course made a point of transactions constructed with no real business purpose other then to sidestep rules, is a road one should stay clear off as much as possible, and I often find that being very good advice in general

[Marek Muc]

Leo was asking for a friend