Accounting for Leases: Lessors

Accounting for Leases: Lessors

The sixth in our Accounting for Leases Under ASC 842 series, this article addresses the accounting by lessors for leases classified as sales-type leases, direct financing leases, or operating leases as discussed in an earlier article from this series, Lease Classification and Key Terms.

While ASC 842 did not significantly change the accounting for lessors, the previous accounting model was not retained in its entirety. This article outlines any relevant changes for lessors and how to comply with the guidance properly.


What’s Inside:

  • Reminder of a lessor’s classification of a lease under ASC 842.

  • Summary of accounting requirements based on lease classification.

  • A deep dive into sales-type leases.

  • A deep dive into direct financing leases.

  • Guidance on accounting for operating leases.

  • How to account for lease modifications.

  • Overview of the impairment guidance and practice issues.