Table of Contents

Accounting for Leases. 3

The Nature of a Lease. 3

Lease Components (Lessee) 5

Lease Components (Lessor) 7

Initial Direct Costs. 7

Lease Consideration. 7

The Lease Term.. 8

Initial Measurement of Lease Payments. 8

Subsequent Measurement of Lease Payments. 9

Types of Leases. 9

Asset and Liability Recognition (Lessee) 11

Initial Measurement 11

Short-Term Leases. 11

Finance Leases. 11

Operating Leases. 12

Optional Lease Payments. 13

Right-of-Use Asset Impairment 14

Leasehold Improvement Amortization. 14

Subleases. 14

Maintenance Deposits. 14

Derecognition. 15

Lease Recognition Topics (Lessor) 15

Sales-Type Leases. 15

Direct Financing Leases. 17

Operating Leases. 18

Variable Lease Payments. 18

Lease Modifications. 19

Lessee Impact 19

Lessor Impact 21

Elections. 23

Discount Rate. 23

Separation of Non-Lease Components. 23

Sale and Leaseback Transactions. 24

Lease Presentation. 25

Lease Disclosures. 26

Lessee Disclosures. 27

Lessor Disclosures. 28

Sale and Leaseback Transactions. 29

Transition Accounting. 29

Review Questions. 31

Answers to Course Questions. 32

Glossary. 35

Index. 38

CPE Exam