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Chapter 9 — Lessor Accounting

9.5 Leveraged Lease Accounting

9.5 Leveraged Lease Accounting

Footnotes

26
There are minor grammatical differences between the leveraged lease guidance in ASC 840 and that in ASC 842; however, such differences are minor and not expected to result in a change in the interpretation or application of the guidance for lessors. Therefore, those differences are not highlighted in this chapter.
27
In this example, it is assumed that the lessor did not make any advance, deposit, or settlement payments to the tax authority up to the date of the recalculation and that a projected settlement amount was not included in the recalculation. ASC 842-50-35-13 provides guidance on how, when a lessor has entered into (or expects to enter into) a settlement with a tax authority, such payments, cash flow projections, or both should be included in a recalculation.
28
Note that if these journal entries were being made as of the lessor’s initial adoption of this guidance, the amounts affecting the statement of operations would be recorded as an adjustment to the beginning balance of retained earnings as of the beginning of the period in which the guidance is adopted.