Misconception · MIS:cash-and-title-prove-sale-leaseback-sale

Mistaken idea “Cash and title prove a sale-leaseback sale”

Mistaken reasoning: This mistake records a sale before testing control transfer and repurchase terms.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

The transfer must satisfy the applicable Topic 606 sale requirements. A failed sale remains a financing even when cash and title move.

Where to watch

When this mistake may appear

  • The buyer-lessor pays cash and receives legal title.
Check your work

Your work may contain this mistake if:

  • Derecognize the asset and record a gain without applying the sale-control requirements.