Sales-type lease

[mfrasc]

Hi,
I’m a little confused with how the CFA curriculum explains the recording of a sales-type lease by the lessor and lessee.
In Reading 16, in Example 14 at the end of the Leasing section, they give an example where the lessor enters into a lease agreement where they will receive 4 annual lease payments of EUR 28,679 (PV = EUR 100k). The fair value of the equipment is EUR 90k, so because the PV of lease payments > fair value of equipment, this is considered a sales-type lease, I get this part. The lessor recognizes a EUR 10k profit at inception of the lease.
What confuses me is in section 6.2.1 Accounting and Reporting by the Lessee, it says the initial value of both the leased asset and lease payable is the lower of the fair value of leased asset or PV of future lease payments. Then using the same example above, this means that the lessee would put the leased asset at EUR 90k even though the PV of lease payments is EUR 100k? This part doesn’t add up for me. I would expect the lessee to put the leased asset at EUR 100k.
If someone could explain this part to me, I would appreciate it.
Thank you

 

[S2000magician]

In the example they jump back and forth between describing €90,000 as the fair value of the asset and describing it as the carrying value. The latter is consistent with the text describing how the profit is calculated, and there is no reason to expect that the carrying value and the fair value are equal.
I think it ‘s a poorly worded example.