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Chapter 12 — Sublease Accounting

12.1 Overview

12.1 Overview

ASC 842-10 — Glossary
Sublease
A transaction in which an underlying asset is re-leased by the lessee (or intermediate lessor) to a third party (the sublessee) and the original (or head) lease between the lessor and the lessee remains in effect.
When the original lessee subleases the leased asset to an unrelated third party, the lessee becomes the intermediate lessor in the sublease arrangement. The graphic below illustrates the flow of transactions and the parties involved in a sublease.