Sale and Leaseback

Knowledge Center

What is Sale and Leaseback?

A Sale and Leaseback is the sale of one or more assets to a third party that immediately leases it back to the original owner. This financial lease method can be used as a way to improve the financial position of the originating company by offloading assets to a buyer that is presumably interested in making a long-term secured investment. Also tax benefits may be associated with it. It results in a one-off profit benefit which will be reflected in the Operating Profit and Earnings per Share. Furthermore its aim may be to transfer ownership to a holding company while keeping proper track of the ongoing worth and profitability of the asset.

Typical assets involved in a Sale and Leaseback include buildings, apartments, industrial equipment, ships, airplanes, etc. Normally the seller remains in day-to-day operational control of the property.

Some leaseback arrangements allow the seller, or current lessee, the option to buy back the property at a future date. During the life of the leaseback, however, the buyer derives tax benefits from the arrangement, such as being credited for depreciation of the property.

Also called: Leaseback.

Forum Forum about Sale and Leaseback. 🔥 Sale Leaseback Accounting Circle How does the accounting circle look like? What are the classifications of assets and liabilities for each lessee and leessor?... 1   Start a new topic about Sale and Leaseback Sign up for free

Courses about Sale and Leaseback. Beginners Course Advanced Course Course for Experts

Expert Tips Advanced insights about Sale and Leaseback. Here you will find professional advices by experts. Consultancy Tips Teaching Tips Practical Implementation Tips

Information Sources Various sources of information regarding Sale and Leaseback. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.

Tools Useful tools regarding Sale and Leaseback. News Videos Presentations   Books Academic More

Compare with: EBITDA  |  P/E Ratio  |  Accounts Receivables Financing  |  PEG Ratio  |  Relative Value of Growth  |  Economic Value Added  |  Economic Margin  |  Cash Ratio  |  Current Ratio  |  Earnings Per Share  |  Return on Equity  |  Return on Invested Capital  |  Market Value Added  |  CFROI  |  Fair Value  |  TSR  |  Recapitalization  |  Undercapitalization  |  Working Capital

Return to Management Hub: Decision-making & Valuation |  Finance & Investing

More on Management  |  Return to Management Dictionary

This ends our Sale and Leaseback summary and forum.