Strategic Asset Solutions (“SAS”) helps companies improve their asset and capital efficiency benefiting management, employees and shareholders by unlocking the hidden value of their real estate holdings through sale leasebacks
Basic Structure of sale leaseback
Tax Consequences
EFFECT OF IFRS-16 ON SALE-LEASEBACK TRANSACTIONS
OFF-BALANCE OR NOT?
Fixed Asset on Balance Sheet
Current Asset
(Cash)
(Cash)
Lease Liability
(Present Value of Lease)
(Present Value of Lease)
Lease Liability
(Lease Rent Payment Obligations)
(Lease Rent Payment Obligations)
Lease Asset (Right of Use)
Based upon present value of lease
Accelerated depreciation over lease term
Lease Liability
Aggregate obligations of lease payments
Tax Deductible
Reduces Real Estate Holding / Operating Costs
Eliminates payment of property taxes on land & building
Reduce insurance costs (landlord to provide insurance on building)
Structural and roof repairs are responsibility of landlord