What is the accounting treatment for a sale and leaseback transaction under IFRS 16?

Under IFRS 16, the seller-lessee must first determine if the transfer of the asset satisfies the performance obligations in IFRS 15 to be accounted for as a sale. If it is a sale, the seller-lessee measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the seller-lessee recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the transfer is not a sale, the transaction is treated as a secured financial liability.