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Chapter 9 — Lessor Accounting

9.2 Lease Classification

9.2 Lease Classification

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Footnotes

1
If a lease component is at or near the end of its economic life, it is not subject to the economic life test. See Section 9.2.1.3.1 for more information.
2
For example, the inclusion of initial direct costs in the determination of the rate implicit in the lease results in a lower rate (see Cases A and C in Example 1, which begins in ASC 842-30-55-19). This lower implicit rate applied to the future lease payments effectively results in a higher net investment in the lease, which inherently includes the initial direct costs.