I have a scenario in which the company A is selling its spare parts inventory on the value that is in the books to company B. Company B will maintain the inventory and after 5 year Company A will buy back the remaining inventory. The price of inventory will increase by 10% every year. Assuming inventory value today is $2m. 1. what will be the accounting treatment of the first transaction in Company A books (selling the inventory) 2. in five years time is there any provision is required in company A books. 3. what will be the accounting treatment of the 2nd transaction in Company A books ( purchasing back the inventory).
