| May 1, 1990 | |
| Scarborough District Office | Head Office |
| Chief of Appeals | Financial Industries Division |
| M.R. Rose | Peter Lee |
| (613) 957-2745 | |
| Attention: Joanne Millet | |
| Appeals Division | File No. 7-900539 |
Subject: Inventory Allowance on Leased Asset
This is in reply to your memorandum of April 23, 1990, wherein you have requested us to clarify certain comments in our previous memorandum of April 11, 1990 (#7-4711).
The term "purchase option" referred to in paragraph (b) of our previous memorandum should be read as "purchase option contained either in the lease or in a separate agreement". We reiterate that it is always a question of fact as to whether a leased asset is "an inventory held for sale" for the purposes of former paragraph 20(1)(gg) of the Act. If you have difficulties applying our general views to a specific fact situation, you may consider referring the matter to us for a detailed review.
ChiefLeasing and Financing SectionFinancial Industries DivisionRulings Directorate