Deloitte
Accounting Research Tool
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Chapter 4 — Components of a Contract

4.1 Introduction

4.1 Introduction

The phrase “whether a contract is or contains a lease” (emphasis added) is consistently used throughout ASC 842-10-15 and Chapter 3 of this Roadmap. The reason behind this wording choice is more fully explained in Section 3.2.2 — a lease may be embedded in a larger service arrangement. When that is the case, contracts contain both lease and nonlease components. Generally, the nonlease components are services that the supplier is also performing for the customer. For example, in a single contract, the supplier could be leasing equipment to a customer while also agreeing to provide ongoing maintenance services for the equipment throughout the period of use.