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Preface

PwC is pleased to offer our Leases guide. This guide was fully updated in August 2018. Since then,
certain sections have been updated to reflect new guidance or interpretations. See Appendix D,
Summary of significant changes, for more information.

The FASB’s new standard on leases, ASC 842, will replace today’s leases guidance in 2019. This guide
discusses lessee and lessor accounting under ASC 842. The first four chapters provide an introduction
and guidance on determining whether an arrangement is (or contains) a lease and how to classify and
account for lease and nonlease components. This guide also discusses the modification,
remeasurement, and termination of a lease, sale and leaseback transactions, leveraged lease
transactions, as well as other topics. Chapters 9 and 10 address the presentation and disclosure
requirements as well as the effective date and transition.

References to US GAAP

Definitions, full paragraphs, and excerpts from the FASB’s Accounting Standards Codification are
clearly designated, either within quotes in the regular text or enclosed within a shaded box. In some
instances, guidance was cited with minor editorial modification to flow in the context of the PwC
Guide. The remaining text is PwC’s original content.

References to other chapters and sections in this guide

When relevant, the discussion includes general and specific references to other chapters of the guide
that provide additional information. References to another chapter or particular section within a
chapter are indicated by the abbreviation “LG” followed by the specific section number (e.g., LG 2.3.2
refers to section 2.3.2 in chapter 2 of this guide).

References to other PwC guidance

This guide focuses on the accounting and financial reporting considerations for leases. It supplements
information provided by the authoritative accounting literature and other PwC guidance. This guide
provides general and specific references to chapters in other PwC guides to assist users in finding
other relevant information. References to other guides are indicated by the applicable guide
abbreviation followed by the specific chapter or section number. The other PwC guides referred to in
this guide, including their abbreviations are:

□ Business combinations and noncontrolling interests (BCG)

□ Consolidation and equity method of accounting guide (CG)

□ Financial statement presentation (FSP)

□ Financing transactions (FG)

□ Income taxes (TX)

□ Loans and investments (LI)

iii