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Table of contents

1 Introduction

1.1 Background ...........................................................................................................................1-2
1.2 High-level overview ..............................................................................................................1-4
1.3 Comparison of ASC 842 and ASC 840 ................................................................................1-6

1.4 Disclosures ............................................................................................................................1-10
1.5 Transition and effective date ...............................................................................................1-10
1.6 Implementation guidance ....................................................................................................1-10

2 Scope
2.1 Chapter overview ..................................................................................................................2-2
2.2 Exceptions to applying lease accounting ............................................................................2-2

2.3 Definition of a lease ..............................................................................................................2-3
2.4 Separating lease and nonlease components .......................................................................2-24

2.5 Components within a lease ..................................................................................................2-42
2.6 Reassessment of whether a contract contains a lease ........................................................2-45

3 Lease classification
3.1 Chapter overview ..................................................................................................................3-2

3.2 Overview of lease classification ...........................................................................................3-2
3.3 Lease classification criteria ..................................................................................................3-7

3.4 Application of the “reasonably certain” threshold .............................................................3-39
3.5 Lessee classification examples.............................................................................................3-40
3.6 Lessor classification examples .............................................................................................3-51

4 Accounting for leases

4.1 Chapter overview ..................................................................................................................4-2
4.2 Initial recognition and measurement – lessee ...................................................................4-2

4.3 Initial recognition and measurement – lessor ...................................................................4-14
4.4 Subsequent recognition and measurement – lessee ..........................................................4-28
4.5 Subsequent recognition and measurement – lessor ..........................................................4-33

4.6 Impairment – lessee.............................................................................................................4-37
4.7 Impairment – lessor .............................................................................................................4-38

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