Notes Forming Part of the Consolidated Financial Statements

16. Lease receivable

During the period, the Group entered into a bareboat hire purchase sale agreement for the disposal of the vessel Oscar Wilde (note 10). Legal title to the vessel transfers to the lessor only on payment of the final instalment. The deferred consideration has been treated as a finance lease receivable at an amount equivalent to the net investment in the lease.

Amounts received less the net benefit recognised in the period, a total of €2.4 million has been recognised in the Consolidated Statement of Cashflows as proceeds on disposal of property, plant and equipment (see note 10).

The amounts receivable under the agreement at 31 December were as follows;

The Group is not exposed to foreign currency risk as a result of the lease arrangement, as it is denominated in Euro. Residual value risk on the vessel under lease is not significant, because of the existence of a secondary market in vessels.

The Directors of the Company estimate the loss allowance on the finance lease receivable at 31 December at an amount equal to lifetime expected credit losses. None of the finance lease receivable at 31 December 2019 was past due, and taking into account the historical payment experience together with the retention of legal title the Directors of the Group consider that no provision for expected credit losses is required.