The FAR Council issued a proposed rule change to FAR 31.205-16, Gains and losses on disposition or impairment of depreciable property or other capital assets, that addresses treatment of sales and leasebacks.  The proposed changes include (1) date of disposition for a sales and leaseback arrangement will be the date of the arrangement rather than the end of lease period (2) gains or losses will be the difference between the fair market value on the disposition date and undepreciated balance on the disposition date and (3) the amount of the gain recognized for contract costing purposes will be the difference between the acquisition cost of the asset and its undepreciated balance; for assets acquitted under a capital lease, the gain will be limited to the capitalized value of the leased property and its undepreciated balance (Fed. Reg. 29380).   

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