CCH Accounting for Leases analyzes FASB Statement No. 13, Accounting for Leases, which was released in November 1976, and the numerous successive Interpretations, Technical Bulletins, and Emerging Issue Task Force consensus issues that have been issued since then. Since Statement’s 13 issuance, the FASB has amended the Statement 18 times, issued 6 Interpretations, and 12 Technical Bulletins. Further, the EITF has addressed leasing transactions in more than 30 different Issues (excluding issues related to consolidations of special purpose entities).

This publication delves into the complex nature of the criteria set through defining a lease and determining whether it should be accounted for as a sale/purchase or as an operating lease. CCH Accounting for Leases also includes various interpretations and commentary related to investment tax credits (ITC) in the event ITC is reinstated in the future.
 

Topics and Contents:

Section I: Interpretations

• Introduction To Leases
• Paragraphs 1-4: Scope
• Definition of Terms
• Paragraph 5(A): Related Parties in Leasing Transactions
• Paragraph 5(B): Inception of the Lease
• Paragraph 5(C): Fair Value of the Leased Property
• Paragraph 5(D): Bargain Purchase Option
• Paragraph 5(E): Bargain Renewal Option
• Paragraph 5(F): Lease Term
• Paragraph 5(G): Estimated Economic Life of Leased Property
• Paragraph 5(H): Estimated Residual Value of Leased Property
• Paragraph 5(I): Unguaranteed Residual Value
• Paragraph 5(J): Minimum Lease Payments
• Paragraph 5(K): Interest Rate Implicit in the Lease
• Paragraph 5(L): Lessee’s Incremental Borrowing Rate
• Paragraph 5(M): Initial Direct Costs
• Paragraph 5(N): Contingent Rentals
• Paragraph 5(O): Penalty
• Classification of Leases
• Paragraph 6: Lease Classification
• Criteria for Classifying Leases (Other Than Leveraged Leases)
• Paragraph 7: Criteria for Classifying Leases
• Paragraph 8: Lessor’s Additional Criteria for Classifying Leases
• Paragraph 9: Changes in Lease Provisions and Estimates
• Accounting and Reporting By Lessees
• Paragraphs 10-11: Capital Leases
• Paragraph 12: Accounting for Capital Lease Payments
• Paragraph 13: Presentation of Assets Under Capital Leases
• Paragraph 14: Accounting for Changes in Capital Lease Provisions and
• Renewals, Extensions, Or Terminations of Capital Leases By Lessees
  
• Paragraph 15: Operating Leases
• Paragraph 16: Disclosures
• Accounting and Reporting By Lessors
• Paragraph 17: Sales-Type Leases
• Paragraph 18: Direct Financing Leases
• Interpretations Applicable To Both Sales-Type and Direct Financing Leases
• Paragraph 19: Operating Leases
• Paragraph 20: Participation By Third Parties
• Paragraph 21: Sale of Property Subject To an Operating Lease
• Paragraph 22: Accounting When Sale Is Treated as a Collateralized Borrowing
• Paragraph 23: Disclosures
• Leases Involving Real Estate
• Paragraph 24: Overview
• Paragraph 25: Leases Involving Land Only
• Paragraph 26: Leases Involving Land and Building(S)
• Paragraph 27: Leases Involving Equipment as Well as Real Estate
• Paragraph 28: Leases Involving Only Part of a Building
• Leases Between Related Parties
• Paragraphs 29-31: Leases Between Related Parties
• Sale-Leaseback Transactions
• Paragraphs 32-33: Seller-Lessee’s Accounting for Sale-Leaseback Transactions
• Paragraph 34: Lessor’s Accounting for Sale-Leaseback Transactions
• Sale-Leaseback Transactions Involving Real Estate
• Paragraph 34A: Scope of Fasb Statement No. 98
• Paragraph 34B: Criteria for Sale-Leaseback Accounting
• Paragraph 34C: "Normal" Leasebacks
• Paragraph 34D: Terms of the Sale-Leaseback Transaction
• Paragraph 34E: Continuing Involvement
• Paragraph 34F: Forms of Continuing Involvement from Fasb Statement No. 66
• Paragraphs 34G-34H: Other Forms of Continuing Involvement
• Paragraphs 34I-34K: Sale-Leaseback Transactions By Regulated Enterprises
• Paragraphs 34L-34M: Financial Statement Presentation and Disclosure
• Accounting and Reporting for Subleases and Similar Transactions
• Paragraph 35: General
• Paragraphs 36-37: Accounting By Original Lessor
• Paragraphs 38-39: Accounting By Original Lessee
• Paragraph 40: Accounting By the New Lessee
• Accounting for Leases in a Business Combination
• Paragraphs 40A-40E: Application of Fasb Statement No. 13 in a Business Combination
• Accounting and Reporting for Leveraged Leases
• Paragraphs 41-42: Accounting and Reporting for Leveraged Leases
• Paragraph 43: Net Investment in a Leveraged Lease
• Paragraphs 44-45: Accounting for a Leveraged Lease Over Its Term
• Paragraph 46: Changes in Important Assumptions Affecting Leveraged Leases
• Paragraph 47: Financial Statement Presentation and Disclosure
  
  Section II: Future Expectations and Future Projects
  
  
• Recent Developments
  
  Section III: Appendices
  
  
• Appendix I: Use of Special-Purpose Entities in Leasing Transactions
• Appendix II: Index of Accounting Literature Affecting Leasing Transactions Appendix III: SEC Staff Letter On Accounting for Leasehold Improvements and Lease Incentives
  Index