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Chapter 12 — Sublease Accounting

12.2 Classification of a Sublease

12.2 Classification of a Sublease

ASC 842-10
25-6 When classifying a sublease, an entity shall classify the sublease with reference to the underlying asset (for example, the item of property, plant, or equipment that is the subject of the lease) rather than with reference to the right-of-use asset.

Footnotes

1
Unlike a lessor applying ASC 842, which can classify a lease as an operating, direct financing, or sales-type lease, a lessor applying IFRS 16 can classify a lease as either an operating or finance lease. A finance lease under IFRS 16 is classified in the same manner as a sales-type lease under ASC 842.