6.6 Fees Paid by the Lessee to Owners of SPEs
ASC 842-10
30-5 At the commencement date, the lease payments shall consist of the following payments relating to the use of the underlying asset during the lease term: . . .
e. Fees paid by the lessee to the owners of a special-purpose entity for structuring the transaction. However, such fees shall not be included in the fair value of the underlying asset for purposes of applying paragraph 842-10-25-2(d). . . .
In the case of SPEs, lease payments should include any amounts paid by the
lessee to the owners of the SPE for structuring the
transaction. Although these fees are included in the lease
payments, the fees should be excluded from the calculation
of the fair value of the underlying asset in the
determination of the appropriate lease classification under
ASC 842-10-25-2(d).
Example 6-14
Lessor LLC (a VIE) holds a single real estate asset that it leases to Lessee.
The lease contains a residual value guarantee (see
the next section). Lessee accounts for the lease
as an operating lease. Further, Lessee has a
variable interest in Lessor LLC through the
residual value guarantee.
Although Lessee has a variable interest, Lessor LLC is consolidated by REIT,
which is the primary beneficiary of Lessor LLC.
REIT is in the business of owning real estate and
leasing it to tenants as a source of financing.
Lessor LLC was created by REIT to own the specific
underlying real estate. REIT charges Lessee
certain fees as compensation for the initial setup
costs of Lessor LLC.
The lease payments should include the fees charged to Lessee by REIT for structuring the transaction.