UITF Abstract 36 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:

• icaew.com/newukgaap

Synopsis

A seller of a right to use capacity should only report the transaction as a sale if:

• The purchasers right of use is exclusive and irrevocable 
• The asset component is specific and separable
• The term of the contract is for a major part of the asset’s useful economic life
• The attributable cost or carrying value can be measured reliably 
• No significant risks are retained by the seller

Where a sale of an asset is reported it should only be reported as turnover if the assets were designated as held for sale. Otherwise reported as sales of fixed assets. Any amounts included in turnover and profits from these transactions should be clearly disclosed.

• Read UITF Abstract 36 (PDF 60KB/6 pages)

Last updated 21 June 2015