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Scope

Figure 2-7
A comparison of examples 2-15 through 2-17

Allocation of
fixed payment
to lease
component
and variable
payment to
nonlease
Variable component
Variable payment meet
payment relate at least transaction
depend partially to price Fixed Variable
on a rate lease allocation payment payment
Example or index? component? objective? allocated to allocated to
2-15 No Yes N/A Both lease Both lease and
and nonlease nonlease, but
only upon
occurrence of
the underlying
event

2-16 No No No Both lease Both lease and
and nonlease nonlease, at
contract
inception

2-17 No No Yes Lease Nonlease

2.4.6.2 Allocating variable consideration for lessees

A lessee allocates consideration in a contract to lease and nonlease components based on their relative
standalone prices. Only consideration that is discussed in ASC 842-10-15-35 is included in the
allocable consideration.

ASC 842-10-15-35

The consideration in the contract for a lessee includes all of the lease payments described in paragraph
842-10-30-5, as well as all of the following payments that will be made during the lease term:

a. Any fixed payments (for example, monthly service charges) or in substance fixed payments, less
any incentives paid or payable to the lessee, other than those included in paragraph 842-10-30-5

b. Any other variable payments that depend on an index or a rate, initially measured using the index
or rate at the commencement date.

Variable payments that do not depend on an index or rate should be excluded from lease payments at
lease commencement for initial measurement. Subsequent to initial measurement, these variable
payments are recognized when the event determining the amount of variable consideration to be paid

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