BLM20155 - Defining long funding leases: basic definition: lease in a sale and finance leaseback (CAA01/S70K (1)(c))
The third of the definitions means that the lease in a sale and finance leaseback is a long funding lease.
This definition is needed because, under GAAP, it might be argued that the lease in a sale and finance leaseback should be accounted for as if it were a loan. Section 70K (1)(c) removes any doubt about the tax treatment, which is discussed at BLM16010 and BLM16015.
The concept of a sale and finance leaseback is defined in CAA01/S221, see CA28500. An important feature of the definition is that the lease must be accounted for as a finance lease by the lessor. It does not matter how the lessee accounts for the lease.