The history of leasing is a history full of misunderstandings!
👉 Is Sale & Lease-back off-balance? Absolutely, yes!
There isn't too much literature or case law on leasing, which is also explained by the fact that all parties are satisfied with how things work in practice.
We also thought that the HGB accounting treatment of Sale & Lease-back shouldn't hold any more surprises.
Think again!
A client has just informed us that their auditor (Next Ten!) is seriously claiming that
🔹 leasing via purchase order assignment is off-balance (economic ownership with the leasing company), while
🔹 in Sale & Lease-back, economic ownership remains with the lessee – therefore the client must continue to capitalize the asset!
As usual, the auditor is not bothered by the fact that Sale & Lease-back leads to an additional capitalization on the leasing company's balance sheet.
👉 But the prospect of the client's financing costs getting caught in the interest barrier is completely unreasonable!
Have you ever heard such interesting opinions during your annual financial statement discussions?
And did the auditor actually manage to push this view through?
Please send me a personal message or reach out via my contact details in the comments!
#LeasingCanDoMore - You just need an auditor who's on the ball!
The history of leasing is a history full of misunderstandings!
