X Ltd. sold Plant & Machinery having WDV of 60 lakhs to Y Ltd. for 75 lakhs (Fair value of 75 Lakhs) and the same plant was leased back by Y…
CA Intermediate · Advanced Accounting · PYQS · May 2025
X Ltd. sold Plant & Machinery having WDV of 60 lakhs to Y Ltd. for 75 lakhs (Fair value of 75 Lakhs) and the same plant was leased back by Y Ltd. to X Ltd. The lease back is in the nature of operating lease. The treatment will be:
Suggested Answer and Working Notes:
Correct Answer: Option (B)
X Ltd. should recognize the Profit of 15 lakhs immediately.
Topics: AS 19
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