Page 271 - pwc-lease-accounting-guide_Neat
P. 271
Presentation and disclosure
If a lessor elects the practical expedient to not separate nonlease components from lease components
(discussed in LG 2.4.4.1), it is required to disclose the following:
□ Its accounting policy election,
□ The class or classes of underlying assets for which it has elected to apply the practical
expedient,
□ The nature of:
o The lease and nonlease components included within the combined component and
o The nonlease components, if any, that are accounted for separate from the combined
component because they do not qualify for the practical expedient, and
□ Whether the combined component is accounted for under the Leases or the Revenue guidance
9.4 Sale and leaseback transactions
Both the buyer-lessor and seller-lessee in a sale and leaseback transaction should disclose the terms
and conditions of the transactions. The seller-lessee should also disclose any gains or losses arising
from the transaction separate from gains or losses on disposal of other assets.
9.5 Leveraged leases
If leveraged leasing is a significant part of a lessor’s business activities (based on revenue, net income,
or assets), the components of the net investment balance in leveraged leases should be disclosed.
Those components include the following:
□ Rentals receivable
□ Investment-tax-credit receivable
□ Estimated residual value of the leased asset
□ Unearned and deferred income
Lessors are required to provide additional disclosures about their financing receivables pursuant to
ASC 310. See FSP 8.3 for further discussion.
If accounting for leveraged leases creates a variation from the customary relationship between income
tax expense and pretax accounting income, and the reason for that variation is not otherwise apparent,
the lessor should disclose the reason for the variation.
9.6 Related party leases
Related party lessees and lessors should apply the disclosure requirements for related party
transactions in ASC 850. See FSP 26 for information.
9-13
