502.2 Sale & Leaseback

A sale and leaseback occurs when PSU sells an asset and then enters into a lease agreement to lease the asset back. If your Department is contemplating a sale/leaseback transaction, please contact the Contracting and Procurement Services team. The four capitalization criteria must be applied to the leaseback in order to determine if it is a capital or operating lease.

REPORTING REQUIREMENTS FOR SALE/LEASEBACK INVOLVING PERSONAL PROPERTY: For sale/leaseback transactions involving only personal property, the institution should include the lease information in the appropriate schedule for either a capital or operating lease.

REPORTING REQUIREMENTS FOR SALE/LEASEBACK INVOLVING REAL PROPERTY: For sale/leaseback transactions involving real property, there are additional reporting requirements. PSU must disclose in the notes to the financial statements, the obligations for future minimum lease payments.