Table of Contents INTERPRETATIONS OF TOPIC 840, ACCOUNTING FOR LEASES. Paragraph : General...Subtopic

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Preface... Preface i Recent Developments...Developments i INTERPRETATIONS OF TOPIC 840, ACCOUNTING FOR LEASES Leases Overall (840-10) Status Paragraph 845-10-00-1: General...Subtopic 840-10 1 Overview and Background Paragraphs 840-10-05-1 through 05-08: General...Subtopic 840-10 2 Paragraph 840-10-05-9 through 05-9C: Lessees...Subtopic 840-10 4 Paragraph 840-10-05-10: Lessors...Subtopic 840-10 5 Objectives Paragraph 840-10-10-1: General...Subtopic 840-10 6 Scope and Scope Exceptions Paragraphs 840-10-15-1 through 15-2: General...Subtopic 840-10 7 Interpretation 840-10-15-2.A: Lease Broker Accounting...Subtopic 840-10 7 Paragraphs 840-10-15-3 through 15-5: General...Subtopic 840-10 9 Interpretation 840-10-15-3.A: Determining Whether an Arrangement Contains a Lease...Subtopic 840-10 9 Interpretation 840-10-15-3.B: Transportation or Throughput Agreements...Subtopic 840-10 11 Interpretation 840-10-15-3.C: Power Purchase Contracts...Subtopic 840-10 11 Interpretation 840-10-15-3.D: Facility Management Arrangements...Subtopic 840-10 12 Interpretation 840-10-15-3.E: Management Contracts and Sale-Managebacks Involving Real Estate...Subtopic 840-10 15 Interpretation 840-10-15-3.F: Manager Involvement in Asset Construction...Subtopic 840-10 16 6/11 2011 CCH. All rights reserved. Contents i

Accounting for Leases Interpretation 840-10-15-3.G: Take-or-Pay Contracts... Subtopic 840-10 18 Interpretation 840-10-15-3.H: Applicability of Topic 840 to Undivided Interests... Subtopic 840-10 19 Paragraphs 840-10-15-6 through 15-15: General... Subtopic 840-10 21 Interpretation 840-10-15-15.A: Equipment Used in Connection with a Lease to Extract Natural Resources... Subtopic 840-10 23 Interpretation 840-10-15-15.B: Asset Constructed from Precious Metals... Subtopic 840-10 23 Paragraphs 840-10-15-16 through 15-19: General... Subtopic 840-10 24 Interpretation 840-10-15-16.A: Accounting for Multiple-Element Arrangements Containing a Lease... Subtopic 840-10 24 Paragraphs 840-10-15-20 through 15-21: General... Subtopic 840-10 25 Interpretation 840-10-15-20.A: Scope Application to Residual Value Guarantees... Subtopic 840-10 25 Paragraph 840-10-15-22: Lessees... Subtopic 840-10 27 Paragraph 840-10-15-23: Lessors... Subtopic 840-10 28 Topical Definitions Section 840-10-20: Glossary: Acquiree through Bargain Purchase Option... Subtopic 840-10 29 Interpretation 840-10-20.A: Purchase Options Stated in Terms of a Fixed Amount or Percentage... Subtopic 840-10 29 Interpretation 840-10-20.B: Purchase Option at Fair Value As Encumbered by Renewal Options... Subtopic 840-10 31 Interpretation 840-10-20.C: Bargain Purchase Option As Encumbered by Fixed-Price Renewals... Subtopic 840-10 31 Interpretation 840-10-20.D: Residual Sharing Arrangements That Create Bargain Purchase Options... Subtopic 840-10 32 Interpretation 840-10-20.E: Use of Appraisal Information... Subtopic 840-10 33 Section 840-10-20: Glossary: Bargain Renewal Option... Subtopic 840-10 34 Interpretation 840-10-20.F: Renewal Rents Lower Than Rents During Primary Lease Term... Subtopic 840-10 34 Section 840-10-20: Glossary: Capital Lease through Contingent Rentals... Subtopic 840-10 35 Interpretation 840-10-20.G: Contingent Rent Based on Corporate Sales... Subtopic 840-10 35 Contents ii 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-10-20.H: Disguised Minimum Lease Payments...Subtopic 840-10 35 Interpretation 840-10-20.I: Evaluating Uncertainty in Contingent Rents...Subtopic 840-10 36 Section 840-10-20: Glossary: Direct Financing Lease through Estimated Economic Life...Subtopic 840-10 38 Interpretation 840-10-20.J: Determining Economic Life of Leased Property in Connection with a Real Estate Lease...Subtopic 840-10 38 Interpretation 840-10-20.K: Economic Life vs. Book Depreciation Life...Subtopic 840-10 38 Section 840-10-20: Glossary: Fair Value of Leased Property...Subtopic 840-10 39 Interpretation 840-10-20.L: Effect of a Favorable Lease Encumbering Subleased Property on Determination of the Fair Value...Subtopic 840-10 39 Interpretation 840-10-20.M: Effect of Volume Discounts on Lessor s Determination of Fair Value...Subtopic 840-10 39 Interpretation 840-10-20.N: Transfer of an Option to Acquire Property...Subtopic 840-10 40 Section 840-10-20: Glossary: Fiscal Funding Clause through Incremental Borrowing Rate...Subtopic 840-10 41 Interpretation 840-10-20.O: Effect of Certain Financings Tax Attributes on the Calculation of Incremental Borrowing Rate...Subtopic 840-10 41 Interpretation 840-10-20.P: Determining Subsidiary s Incremental Borrowing Rate...Subtopic 840-10 42 Interpretation 840-10-20.Q: Secured vs. Unsecured Borrowing Rate...Subtopic 840-10 42 Interpretation 840-10-20.R: Lessee Unable to Estimate an Incremental Borrowing Rate...Subtopic 840-10 42 Interpretation 840-10-20.S: Fixed vs. Floating and Foreign Currency Incremental Borrowing Rate...Subtopic 840-10 43 Section 840-10-20: Glossary: Indirectly Related to the Leased Property through Interest Rate Implicit in the Lease...Subtopic 840-10 44 Interpretation 840-10-20.T: Determination of Investment Tax Credit Realizable by the Lessor...Subtopic 840-10 44 Section 840-10-20: Glossary: Lease through Lease Inception...Subtopic 840-10 45 Interpretation 840-10-20.U: Lease Classification Date vs. Date Leased Asset Is Recorded...Subtopic 840-10 45 Interpretation 840-10-20.V: Effect of Construction Cost Overruns on Lease Inception...Subtopic 840-10 46 6/11 2011 CCH. All rights reserved. Contents iii

Accounting for Leases Section 840-10-20: Glossary: Lease Term... Subtopic 840-10 47 Interpretation 840-10-20.W: Effect of an Economic Penalty on the Lease Term... Subtopic 840-10 47 Interpretation 840-10-20.X: Short Base-Lease Periods in a Sale-Leaseback Transaction... Subtopic 840-10 47 Interpretation 840-10-20.Y: Effect of Lessee Loans and Guarantees to Lessor... Subtopic 840-10 48 Interpretation 840-10-20.Z: History of Renewing Leases through Exercise of Lease Option... Subtopic 840-10 48 Interpretation 840-10-20.AA: Bargain Purchase Option at End of Lease Renewal Period... Subtopic 840-10 49 Interpretation 840-10-20.AB: Effect of Residual Value Guarantee on Lease Term... Subtopic 840-10 49 Section 840-10-20: Glossary: Leveraged Lease through Penalty... Subtopic 840-10 50 Interpretation 840-10-20.AC: Penalty : Existence of Economic Penalties Resulting from Factors External to the Lease Agreement... Subtopic 840-10 51 Interpretation 840-10-20.AD: Examples of Significant Economic Penalties... Subtopic 840-10 51 Section 840-10-20: Glossary: Probable through Substantially All... Subtopic 840-10 53 Recognition Paragraphs 840-10-25-1: General... Subtopic 840-10 54 Interpretation 840-10-25-1.A: Multiple Equipment Leases Having Varying Lives and Terms... Subtopic 840-10 55 Interpretation 840-10-25-1.B: Accounting for Software Licenses... Subtopic 840-10 56 Interpretation 840-10-25-1d.A: Point in Time for the 90% Recovery Test... Subtopic 840-10 57 Interpretation 840-10-25-1d.B: Determination by Lessee of Investment Tax Credit to Be Realized by Lessor for the 90% Recovery Test... Subtopic 840-10 57 Interpretation 840-10-25-1d.C: Effect of an Investment Tax Credit Basis Reduction on the Lessee s Evaluation of the Leased Property s Fair Value... Subtopic 840-10 58 Interpretation 840-10-25-1d.D: Investment Tax Credit Transferred to Lessee through the Lease Terms... Subtopic 840-10 58 Interpretation 840-10-25-1d.E: Gross-Up of Investment Tax Credit Transferred to Lessee... Subtopic 840-10 59 Contents iv 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Paragraphs 840-10-25-2 through 25-3: General...Subtopic 840-10 61 Paragraph 840-10-25-4: General...Subtopic 840-10 62 Interpretation 840-10-25-4.A: Effect of Lease Payments Denominated in a Foreign Currency...Subtopic 840-10 62 Interpretation 840-10-25-4.B: Impact of Asset Retirement Obligations on Lease Classification...Subtopic 840-10 63 Paragraphs 840-10-25-5 through 25-6: General...Subtopic 840-10 65 Interpretation 840-10-25-5.A: Minimum Lease Payments: Security Deposits and Related Imputed Interest...Subtopic 840-10 66 Interpretation 840-10-25-5.B: Commitment to Buy Leased Asset if Property Is Not Refinanced...Subtopic 840-10 66 Interpretation 840-10-25-5.C: Effect of Lessee Guarantee of Residuals on Lessee Accounting for an Operating Lease...Subtopic 840-10 67 Interpretation 840-10-25-5.D: Factors to Consider in Estimating Executory Costs...Subtopic 840-10 67 Interpretation 840-10-25-5.E: Deposits vs. Residual Value Insurance Premiums...Subtopic 840-10 68 Interpretation 840-10-25-5.F: Guarantee by Lessee of Lessor s Debt and Lessee Loans to Lessor...Subtopic 840-10 69 Interpretation 840-10-25-5.G: Form of Minimum Lease Payments...Subtopic 840-10 71 Interpretation 840-10-25-5.H: Make-Whole Premiums...Subtopic 840-10 71 Interpretation 840-10-25-5.I: Allocation of Residual Value Guarantees...Subtopic 840-10 72 Interpretation 840-10-25-5.J: Future Leasehold Improvements As Minimum Lease Payments...Subtopic 840-10 73 Interpretation 840-10-25-5.K: Existence of Substantial Penalties in the Event of Failure to Renew the Lease...Subtopic 840-10 74 Interpretation 840-10-25-5.L: Existence of Substantial Penalties in the Event of Failure to Exercise a Purchase Option...Subtopic 840-10 74 Interpretation 840-10-25-5.M: Going Concern Presumption in Evaluating Economic Penalties...Subtopic 840-10 75 Paragraph 840-10-25-7: General...Subtopic 840-10 76 Interpretation 840-10-25-7.A: Determining Financial Substance of Third-Party Guarantee of Residuals or Rental Payments Beyond Term of Lease...Subtopic 840-10 76 6/11 2011 CCH. All rights reserved. Contents v

Accounting for Leases Interpretation 840-10-25-7.B: Effect of a Nonrecourse Loan on Lessor s Minimum Lease Payments... Subtopic 840-10 76 Paragraphs 840-10-25-8 through 25-9: General... Subtopic 840-10 77 Interpretation 840-10-25-9.A: Residual Value Guarantees Related to Excess Wear and Tear... Subtopic 840-10 77 Paragraphs 840-10-25-10 through 25-12: General... Subtopic 840-10 78 Interpretation 840-10-25-12.A: Payments to Be Made in the Event of Default... Subtopic 840-10 78 Interpretation 840-10-25-12.B: Lessee Indemnification of Environmental Contamination... Subtopic 840-10 80 Paragraphs 840-10-25-13 through 25-20: General... Subtopic 840-10 81 Interpretation 840-10-25-19.A: Sales-Type Lease Involving Real Estate and Equipment... Subtopic 840-10 82 Interpretation 840-10-25-19.B: Lessor s Determination of the Equipment s Fair Value in a Combined Real Estate Lease... Subtopic 840-10 82 Paragraphs 840-10-25-21 through 25-24: General... Subtopic 840-10 83 Interpretation 840-10-25-23.A: Lessee s Determination of Fair Value... Subtopic 840-10 84 Interpretation 840-10-25-23.B: Land and Building Elements of Leases Involving Only Part of a Building... Subtopic 840-10 84 Interpretation 840-10-25-23.C: Classification of Leases of an Undivided Interest in Property, Plant, or Equipment... Subtopic 840-10 85 Paragraph 840-10-25-25: General... Subtopic 840-10 86 Interpretation 840-10-25-25.A: Leases of Certain Property Owned by a Governmental Unit or Authority... Subtopic 840-10 86 Interpretation 840-10-25-25.B: Build-to-Suit Leases Involving Property Owned by a Governmental Unit or Authority... Subtopic 840-10 87 Paragraph 840-10-25-26: General... Subtopic 840-10 88 Interpretation 840-10-25-26.A: Determination of When Terms of Lease Are Affected by Related Lessor and Lessee... Subtopic 840-10 88 Paragraph 840-10-25-27: Lessees... Subtopic 840-10 89 Paragraphs 840-10-25-28 through 25-33: Lessees... Subtopic 840-10 90 Interpretation 840-10-25-31.A: Evaluating Reasonableness of Lessor s Implicit Rate in the Lease... Subtopic 840-10 90 Contents vi 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-10-25-31.B: Use of Lessor s Maximum Implicit Interest Rate by Lessee...Subtopic 840-10 91 Interpretation 840-10-25-31.C: Use of Lessor s Implicit Rate by Lessee...Subtopic 840-10 92 Paragraph 840-10- 25-34: Lessees...Subtopic 840-10 93 Interpretation 840-10-25-34.A: Tax Indemnifications in Lease Agreements...Subtopic 840-10 93 Paragraphs 840-10-25-35 through 25-36: Lessees...Subtopic 840-10 94 Interpretation 840-10-25-36.A: Lessee Classification of Leases Involving Real Estate...Subtopic 840-10 95 Paragraphs 840-10-25-37 through 25-39B: Lessees...Subtopic 840-10 97 Paragraphs 840-10-25-40 through 25-42: Lessors...Subtopic 840-10 99 Interpretation 840-10-25-42.A: Determining if Costs Create Important Uncertainties...Subtopic 840-10 99 Interpretation 840-10-25-42.B: Classification by Lessor of a Real Estate Lease As a Direct Financing Lease...Subtopic 840-10 100 Paragraphs 840-10-25-43 through 25-45: Lessors...Subtopic 840-10 101 Interpretation 840-10-25-43a.A: Effect of Nonrecourse Debt on Classification As a Sales-Type Lease...Subtopic 840-10 102 Interpretation 840-10-25-43b.A: Accounting for Investment Tax Credit from Assets Leased under Direct Financing Leases...Subtopic 840-10 102 Interpretation 840-10-25-43b.B: Accounting for Investment Tax Credit for a Direct Financing Lease with a Term Shorter Than the Asset s Useful Life...Subtopic 840-10 103 Interpretation 840-10-25-43c.A: Effect of Nonrecourse Debt on Classification As a Sales-Type Lease...Subtopic 840-10 103 Interpretation 840-10-25-43c.B: Applicability of Leveraged Lease Accounting If the Lessor Receives No Tax Benefits...Subtopic 840-10 104 Interpretation 840-10-25-43c.C: Requirement for Lessor s Net Investment to Decline and Rise...Subtopic 840-10 104 Interpretation 840-10-25-43c.D: Applicability of Leveraged Lease Accounting If the Lessor Enters into Nonrecourse Loan after Lease Inception...Subtopic 840-10 105 Interpretation 840-10-25-43c.E: Nonrecourse Debt and Substantial Leverage in a Leveraged Lease...Subtopic 840-10 105 Interpretation 840-10-25-43c.F: Leveraged Leases: Three-Party Criterion...Subtopic 840-10 105 6/11 2011 CCH. All rights reserved. Contents vii

Accounting for Leases Interpretation 840-10-25-43c.G: Existing Assets of the Lessor and Leveraged Lease Accounting... Subtopic 840-10 106 Interpretation 840-10-25-43c.H: Leveraged Leases Involving Foreign Sales Corporations... Subtopic 840-10 107 Interpretation 840-10-25-43c.I: Multiple Lessees in a Leveraged Lease... Subtopic 840-10 108 Interpretation 840-10-25-43c.J: Build-to-Suit Transactions in a Leveraged Lease... Subtopic 840-10 110 Interpretation 840-10-25-43c.K: Leveraged Leases Lessor That Is a Partnership or Variable Interest Entity... Subtopic 840-10 110 Paragraphs 840-10-25-46 through 25-50: Lessors... Subtopic 840-10 112 Paragraphs 840-10-25-51 through 25-52: Lessors... Subtopic 840-10 113 Interpretation 840-10-25-51.A: Meaning of at or Near the End of the Existing Lease Term... Subtopic 840-10 113 Interpretation 840-10-25-51.B: Renewal or Extension of an Existing Sales-Type or Direct Financing Lease through an Intermediary Third Party... Subtopic 840-10 113 Interpretation 840-10-25-51.C: Renewal or Extension of an Operating Lease... Subtopic 840-10 114 Paragraph 840-10-25-53: Lessors... Subtopic 840-10 115 Interpretation 840-10-25-53.A: Tax Indemnifications in Lease Agreements... Subtopic 840-10 115 Paragraphs 840-10-25-54 through 25-69: Lessors... Subtopic 840-10 116 Interpretation 840-10-25-54.A: Lessor Classification of Leases Involving Real Estate... Subtopic 840-10 119 Interpretation 840-10-25-54.B: Real Estate Investment Trusts... Subtopic 840-10 121 Initial Measurement Paragraph 840-10-30-1: Lessees... Subtopic 840-10 122 Paragraph 840-10-30-2: Lessors... Subtopic 840-10 123 Subsequent Measurement Paragraphs 840-10-35-1 through 35-3A: General... Subtopic 840-10 124 Interpretation 840-10-35-2.A: Reassessing whether an Arrangement Contains a Lease... Subtopic 840-10 125 Paragraph 840-10-35-4: General... Subtopic 840-10 126 Interpretation 840-10-35-4.A: New Leases vs. Lease Modifications... Subtopic 840-10 126 Contents viii 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-10-35-4.B: Troubled Lease Restructurings...Subtopic 840-10 127 Interpretation 840-10-35-4.C: Replacement of Nuclear Fuel Core in Connection with a Nuclear Fuel Lease...Subtopic 840-10 128 Interpretation 840-10-35-4.D: Accounting for a Premium Paid by the Lessor to Induce Lease Cancellation by the Lessee...Subtopic 840-10 129 Interpretation 840-10-35-4.E: Requirement to Assess the Collectibility of Lease Payments in a Troubled Lease Restructuring...Subtopic 840-10 129 Interpretation 840-10-35-4.F: Revisions and Extensions Not Considered Part of the Original Lease Term Capital Leases...Subtopic 840-10 130 Paragraph 840-10-35-5: General...Subtopic 840-10 132 Interpretation 840-10-35-5.A: Applicability of Topic 820 to Finance Lease Acquired in a Business Combination...Subtopic 840-10 132 Paragraphs 840-10-35-6 through 35-9A: Subsequent Measurement General...Subtopic 840-10 134 Interpretation 840-10-35-6.A: Lessee s Accounting for Leasehold Improvements...Subtopic 840-10 135 Interpretation 840-10-35-6.B: Accounting for Leasehold Improvements Involving Airport Facilities...Subtopic 840-10 136 Paragraph 840-10-35-10: Subsequent Measurement Lessors...Subtopic 840-10 138 Derecognition Paragraphs 840-10-40-1 through 40-2: Lessees...Subtopic 840-10 139 Paragraph 840-10-40-3 through 40-4: Lessors...Subtopic 840-10 140 Other Presentation Matters Section 840-10-45: General...Subtopic 840-10 141 Interpretation 840-10-45.A: Lessor s Income Statement Presentation of an Investment Tax Credit...Subtopic 840-10 141 Interpretation 840-10-45.B: Presentation of Leasing Activities in a Consolidated Balance Sheet...Subtopic 840-10 141 Paragraphs 840-10-45-1 through 45-3: General...Subtopic 840-10 143 Paragraph 840-10-45-4: Lessors...Subtopic 840-10 144 6/11 2011 CCH. All rights reserved. Contents ix

Accounting for Leases Disclosure Paragraph 840-10-50-1: General... Subtopic 840-10 145 Interpretation 840-10-50-1.A: Disclosures about Fair Value of Financial Instruments... Subtopic 840-10 145 Interpretation 840-10-50-1.B: Leases with Related Parties... Subtopic 840-10 145 Interpretation 840-10-50-1.C: Concentrations of Credit Risk... Subtopic 840-10 145 Interpretation 840-10-50-1.D: Disclosures about Costs Incurred on Exit or Disposal Activities... Subtopic 840-10 146 Paragraphs 840-10-50-2 through 50-3: Lessees... Subtopic 840-10 147 Interpretation 840-10-50-3.A: Disclosures about Indemnifications and Guarantees... Subtopic 840-10 147 Paragraphs 840-10-50-4 through 50-5: Lessors... Subtopic 840-10 148 Interpretation 840-10-50-4.A: Classification of Lease Related Items as Monetary or Nonmonetary... Subtopic 840-10 148 Implementation Guidance Paragraphs 840-10-55-1 through 55-6: General... Subtopic 840-10 149 Interpretation 840-10-55-2.A: Inception Date of a Master Lease Agreement... Subtopic 840-10 149 Paragraphs 840-10-55-7 through 55-11: General... Subtopic 840-10 150 Interpretation 840-10-55-9.A: Limitation of Lessee Obligation under Residual Value Deficiency Provisions... Subtopic 840-10 150 Interpretation 840-10-55-9.B: Effect of Lessee Guarantee of Residuals on Lessee Accounting for a Capital Lease If the Estimated Residual Value and Amount of Guarantee Are Different... Subtopic 840-10 152 Interpretation 840-10-55-10.A: Fees Paid for Third-Party Credit Guarantees and Title Insurance... Subtopic 840-10 154 Paragraphs 840-10-55-12 through 55-29: General... Subtopic 840-10 155 Illustrations Paragraphs 840-10-55-30 through 55-39: General... Subtopic 840-10 158 Paragraphs 840-10-55-40: Lessees... Subtopic 840-10 162 Implementation Guidance Paragraphs 840-10-55-41 through 55-46: Lessors... Subtopic 840-10 165 Contents x 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Illustrations Paragraph 840-10-55-47: Lessors...Subtopic 840-10 166 Relationships Paragraphs 840-10-60-1 through 60-5: General...Subtopic 840-10 168 Paragraphs 840-10-60-6 through 60-7: Lessees...Subtopic 840-10 169 Transition and Open Effective Date Information Paragraph 840-10-65-1: Transition and Open Effective Date Information...Subtopic 840-10 170 Leases Operating Leases (840-20) Status Paragraph 840-20-00-1: General...Subtopic 840-20 1 Overview and Background Paragraphs 840-20-05-1 through 05-2: General...Subtopic 840-20 2 Paragraph 840-20-05-3: Lessees...Subtopic 840-20 3 Paragraph 840-20-05-4: Lessors...Subtopic 840-20 4 Scope and Scope Exceptions Paragraph 840-20-15-1: General...Subtopic 840-20 5 Paragraph 840-20-15-2: Lessees...Subtopic 840-20 6 Paragraph 840-20-15-3: Lessors...Subtopic 840-20 7 Topical Definitions Section 840-20-20: Glossary...Subtopic 840-20 8 Recognition Paragraph 840-20-25-1: General...Subtopic 840-20 10 Interpretation 840-20-25-1.A: Sale or Transfer of Operating Lease Renewal or Purchase Option by Lessee...Subtopic 840-20 10 Interpretation 840-20-25-1.B: Deferral of Moving Costs Incurred by a Lessee...Subtopic 840-20 11 Interpretation 840-20-25-1.C: Lessor s Assessment of the Collectibility of Rent Receivable...Subtopic 840-20 12 Paragraph 840-20-25-2: General...Subtopic 840-20 13 Interpretation 840-20-25-2.A: Nonlevel Rents for Regulated Operations...Subtopic 840-20 14 6/11 2011 CCH. All rights reserved. Contents xi

Accounting for Leases Interpretation 840-20-25-2.B: Time Pattern of the Physical Use of the Property in an Operating Lease... Subtopic 840-20 14 Interpretation 840-20-25-2.C: Lessee s Rent Expense If Lease Includes Both Scheduled Rent Increases and Contingent Rents... Subtopic 840-20 15 Interpretation 840-20-25-2.D: Effect of Revision of Operating Leases on Deferred Rent Credits... Subtopic 840-20 16 Interpretation 840-20-25-2.E: Change in Provision of an Operating Lease... Subtopic 840-20 17 Interpretation 840-20-25-2.F: Lessee s Purchase of Leased Asset (Under an Operating Lease) during the Lease Term... Subtopic 840-20 18 Interpretation 840-20-25-2.G: Lessor s Recognition of Contingent Rent... Subtopic 840-20 19 Paragraphs 840-20-25-3 through 25-7: General... Subtopic 840-20 21 Interpretation 840-20-25-7.A: Lessee Pays Initial Direct Lease Costs... Subtopic 840-20 22 Interpretation 840-20-25-7.B: Lessor Pays Lessee s Costs... Subtopic 840-20 22 Interpretation 840-20-25-7.C: Lease Incentives in an Operating Lease... Subtopic 840-20 23 Interpretation 840-20-25-7.D: Incentive from the Same Lessor... Subtopic 840-20 24 Paragraphs 840-20-25-8 through 25-15: Lessees... Subtopic 840-20 25 Paragraphs 840-20-25-16 through 25-22: Lessors... Subtopic 840-20 27 Interpretation 840-20-25-20.A: Purchase of a Portfolio of Leases... Subtopic 840-20 28 Paragraph 840-20-30-1 Lessees... Subtopic 840-20 29 Subsequent Measurement Paragraph 840-20-35-1: Lessees... Subtopic 840-20 30 Interpretation 840-20-35-1.A: Lessee Loss Recognition on Operating Leases That Are Part of an Asset Group... Subtopic 840-20 30 Interpretation 840-20-35-1.B: Accounting for Guarantees and Indemnifications Included in Lease Agreements... Subtopic 840-20 30 Paragraphs 840-20-35-2 through 35-5: Lessors... Subtopic 840-20 32 Interpretation 840-20-35-2.A: Lessor s Accounting for Deferred Rent... Subtopic 840-20 32 Contents xii 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-20-35-2.B: Change in Provisions of an Operating Lease...Subtopic 840-20 33 Interpretation 840-20-35-2.C: Loss on Exit or Disposal Activities Involving Assets under Operating Leases...Subtopic 840-20 35 Interpretation 840-20-35-2.D: Calculation of Loss on Subleases and Similar Transactions...Subtopic 840-20 38 Interpretation 840-20-35-4.A: Illustration of Accounting If Sale Is Treated as a Borrowing...Subtopic 840-20 39 Interpretation 840-20-35-4.B: Sale or Assignment of Lease Payments Due under an Operating Lease...Subtopic 840-20 40 Derecognition Paragraphs 840-20-40-1 through 40-2: Lessees...Subtopic 840-20 41 Paragraphs 840-20-40-3 through 40-5: Lessors...Subtopic 840-20 42 Interpretation 840-20-40-3.A: Sales of Equipment to a Related or Third-Party Lessor...Subtopic 840-20 43 Interpretation 840-20-40-3.B: Sales of Equipment Subsequently Repurchased Subject to Operating Leases...Subtopic 840-20 45 Interpretation 840-20-40-3.C: Effect of a Long-Term Management Agreement on Sale Recognition...Subtopic 840-20 45 Interpretation 840-20-40-3.D: Effect of Agreement to Repurchase or Bid on Equipment Sold to Third-Party Purchaser on Recognition of Sale...Subtopic 840-20 46 Interpretation 840-20-40-3.E: Effect of Residual Sharing on Sale Recognition of Asset Subject to an Operating Lease...Subtopic 840-20 47 Interpretation 840-20-40-3.F: Effect of Assumption of Risk of Loss on Sale Recognition...Subtopic 840-20 48 Interpretation 840-20-40-3.G: Effect of Significant Administrative Services on Sale Recognition...Subtopic 840-20 49 Interpretation 840-20-40-3.H: Effect of Maintenance or Warranty Risks on Sale Recognition...Subtopic 840-20 49 Interpretation 840-20-40-3.I: Nondiscriminatory Remarketing Agreements...Subtopic 840-20 50 Interpretation 840-20-40-3.J: Lessor s Nonrecourse Debt Related to Equipment under Operating Leases...Subtopic 840-20 50 Interpretation 840-20-40-3.K: Meaning of Substantial Risks of Ownership...Subtopic 840-20 51 6/11 2011 CCH. All rights reserved. Contents xiii

Accounting for Leases Interpretation 840-20-40-3.L: Sale of Undivided Interest in Asset Subject to Operating Lease... Subtopic 840-20 52 Interpretation 840-20-40-3.M: Seller s Purchase of Insurance to Cover Retained Risk... Subtopic 840-20 53 Interpretation 840-20-40-3.N: Sale-Leaseback Sublease Transactions... Subtopic 840-20 54 Paragraph 840-20-40-6: Lessors... Subtopic 840-20 55 Other Presentation Matters Paragraph 840-20-45-1: Lessees... Subtopic 840-20 56 Paragraphs 840-20-45-2 through 45-3: Lessors... Subtopic 840-20 57 Disclosure Paragraphs 840-20-50-1 through 50-3: Lessees... Subtopic 840-20 58 Interpretation 840-20-50-2.A: Disclosure of Rent Commitments... Subtopic 840-20 58 Paragraphs 840-20-50-4 through 50-4A: Lessors... Subtopic 840-20 59 Illustrations Paragraphs 840-20-55-1 through 55-3: General... Subtopic 840-20 60 Implementation Guidance Paragraphs 840-20-55-4 through 55-6: Lessees... Subtopic 840-20 62 Leases Capital Leases (840-30) Status Paragraphs 840-30-00-1: General... Subtopic 840-30 1 Paragraphs 840-30-S00-1: General... Subtopic 840-30 2 Overview and Background Paragraphs 840-30-05-1 through 05-2: General... Subtopic 840-30 2.1 Paragraph 840-30-05-3: Lessees... Subtopic 840-30 3 Paragraph 840-30-05-4: Lessors... Subtopic 840-30 4 Scope and Scope Exceptions Paragraph 840-30-15-1: General... Subtopic 840-30 5 Paragraph 840-30-15-2: Lessees... Subtopic 840-30 6 Paragraph 840-30-15-3: Lessors... Subtopic 840-30 7 Contents xiv 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Topical Definitions Section 840-30-20: Glossary...Subtopic 840-30 8 Recognition Paragraphs 840-30-25-1 through 25-2: Lessees...Subtopic 840-30 9 Interpretation 840-30-25.A: Accounting for Purchased Lease Residuals...Subtopic 840-30 12 Interpretation 840-30-25-2.A: Lease Payments Adjusted Periodically Based on Changes in Indices Specified in the Lease Contract...Subtopic 840-30 13 Paragraph 840-30-25-3: Lessors...Subtopic 840-30 14 Interpretation 840-30-25-3.A: Payments Under Sales-Type Leases Periodically Adjusted Based on Changes in a Government Index...Subtopic 840-30 14 Interpretation 840-30-25-3.B: Lease Payments Adjusted Periodically Based on Changes in Indices Specified in the Lease Contract...Subtopic 840-30 15 Paragraphs 840-30-25-4 through 25-6: Lessors...Subtopic 840-30 16 Interpretation 840-30-25-6.A: Accounting for Future Service Costs under a Sales-Type Lease...Subtopic 840-30 16 Interpretation 840-30-25-6.B: Use of Estimated Residual Value in Excess of Fair Value at Lease Inception...Subtopic 840-30 17 Interpretation 840-30-25-6.C: Sales-Type Leases Involving Software and Hardware...Subtopic 840-30 17 Paragraphs 840-30-25-7 through 25-10: Lessors...Subtopic 840-30 19 Interpretation 840-30-25-10.A: Accounting for the Purchase of a Lease Portfolio...Subtopic 840-30 19 Initial Measurement Paragraphs 840-30-30-1 through 30-4: Lessees...Subtopic 840-30 21 Interpretation 840-30-30-1.A: Lessee s Initial Recording of a Capital Lease...Subtopic 840-30 21 Interpretation 840-30-30-3.A: Effect of Cost Overruns on a Lessee s Recording of a Capital Lease...Subtopic 840-30 22 Paragraph 840-30- 30-5: Lessees...Subtopic 840-30 23 Paragraphs 840-30-30-6 through 30-15: Lessors...Subtopic 840-30 24 Interpretation 840-30-30-8.A: Lessor s Initial Recording of a Sales-Type Lease...Subtopic 840-30 25 6/11 2011 CCH. All rights reserved. Contents xv

Accounting for Leases Subsequent Measurement Subsection 840-30-35: Lessees... Subtopic 840-30 27 Interpretation 840-30-35.A: Lessor Accounting for Maintenance Deposits... Subtopic 840-30 27 Paragraphs 840-30-35-1 through 35-4: Lessees... Subtopic 840-30 28 Interpretation 840-30-35-1.A: Depreciable Life of an Asset Held under a Capital Lease... Subtopic 840-30 28 Paragraphs 840-30-35-5 through 35-9: Lessees... Subtopic 840-30 30 Interpretation 840-30-35-6.A: Lessee s Subsequent Accounting for a Capital Lease... Subtopic 840-30 30 Interpretation 840-30-35-6.B: Amortization of Asset and Reduction of Lease Obligation If a Residual or Stated Guarantee Exists... Subtopic 840-30 32 Interpretation 840-30-35-6.C: Lease Payments Adjusted Periodically Based on Changes in Indices Specified in the Lease Contract... Subtopic 840-30 33 Paragraphs 840-30-35-10 through 35-12: Lessees... Subtopic 840-30 34 Interpretation 840-30-35-12.A: Accounting by the Original Lessee for Subleases and Similar Transactions... Subtopic 840-30 36 Interpretation 840-30-35-12.B: Lessee Loss Recognition on Capital Leases and Operating Leases That Are Part of an Asset Group... Subtopic 840-30 38 Interpretation 840-30-35-12.C: Exception to Sublease Rules in a Sale-Leaseback-Sublease Transaction... Subtopic 840-30 42 Paragraphs 840-30-35-13 through 35-14: Lessees... Subtopic 840-30 43 Paragraphs 840-30-35-15 through 35-20: Lessees... Subtopic 840-30 44 Interpretation 840-30-35-15.A: Lessee s Accounting for Changes in the Provisions of a Capital Lease... Subtopic 840-30 45 Paragraphs 840-30-35-21 through 35-25: Lessors... Subtopic 840-30 47 Interpretation 840-30-35-21.A: Lessee s Accounting for Estimated Residual value... Subtopic 840-30 48 Interpretation 840-30-35-23.A: Lessor s Subsequent Accounting for a Sales-Type Lease... Subtopic 840-30 49 Interpretation 840-30-35-23.B: Amortization of Initial Direct Costs... Subtopic 840-30 50 Interpretation 840-30-35-25.A: Measurement of a Loss from Decline in Residual Value That Is Other Than Temporary... Subtopic 840-30 50 Interpretation 840-30-35-25.B: Upward Adjustments of Guaranteed Residual Values... Subtopic 840-30 51 Contents xvi 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-30-35-25.C: Adjustment of Residual Value in Connection with a Change in Lease Terms...Subtopic 840-30 51 Paragraphs 840-30-35-26 through 35-30: Lessors...Subtopic 840-30 52 Interpretation 840-30-35-26.A: Change in Provisions of a Sales-Type or Direct Financing Lease...Subtopic 840-30 53 Interpretation 840-30-35-26.B: Upgrades to Equipment Under Lease...Subtopic 840-30 55 Paragraph 840-30-35-31: Lessors...Subtopic 840-30 56 Interpretation 840-30-35-31.A: Change in Lease Provisions Resulting from Refunding of Taxable Debt...Subtopic 840-30 56 Paragraphs 840-30-35-32 through 35-36: Lessors...Subtopic 840-30 57 Interpretation 840-30-35-33.A: Illustration of Leveraged Lease Accounting...Subtopic 840-30 58 Interpretation 840-30-35-33.B: Effect of a Third-Party Residual Value Guarantee on Income Recognition under Leveraged Lease Accounting...Subtopic 840-30 63 Interpretation 840-30-35-33.C: Call Options Written on Leveraged Lease Residuals...Subtopic 840-30 64 Interpretation 840-30-35-33.D: Effect of Basis Reduction from Investment Tax Credit on Leveraged Leases...Subtopic 840-30 66 Interpretation 840-30-35-33.E: Initial Direct Costs from Investments in Leveraged Leases...Subtopic 840-30 67 Interpretation 840-30-35-33.F: Effect of Investment Tax Credit Earned but Not Currently Realizable...Subtopic 840-30 67 Interpretation 840-30-35-33.G: Effect of Intra-entity Tax Allocation Agreements on Leveraged Lease Accounting...Subtopic 840-30 67 Paragraphs 840-30-35-37 through 35-47: Lessors...Subtopic 840-30 68 Interpretation 840-30-35-37.A: Illustration of Cumulative Catch-Up Adjustment Required for a Change in Significant Assumptions...Subtopic 840-30 69 Interpretation 840-30-35-37.B: Effect of Change in Tax Benefit Cash Flows on Estimated Total Net Income...Subtopic 840-30 73 Interpretation 840-30-35-37.C: Effect of Refinancing Nonrecourse Debt...Subtopic 840-30 74 Interpretation 840-30-35-37.D: Leveraging-Up a Leveraged Lease...Subtopic 840-30 78 6/11 2011 CCH. All rights reserved. Contents xvii

Accounting for Leases Interpretation 840-30-35-37.E: Changes in Assumptions Affecting Residual Values in a Leveraged Lease... Subtopic 840-30 79 Interpretation 840-30-35-37.F: Restructuring a Troubled Leveraged Lease... Subtopic 840-30 79 Interpretation 840-30-35-37.G: Tax Indemnity Payments in a Leveraged Lease... Subtopic 840-30 82 Interpretation 840-30-35-37.H: Extending a Leveraged Lease... Subtopic 840-30 82 Interpretation 840-30-35-37.I: Contingent Rents in a Leveraged Lease... Subtopic 840-30 83 Paragraphs 840-30-35-48 through 35-52: Lessors... Subtopic 840-30 84 Paragraph 840-30-35-53: Lessors... Subtopic 840-30 85 Interpretation 840-30-35-53.A: Lessor s Sale of Substantially All of the Minimum Rent Payments... Subtopic 840-30 85 Interpretation 840-30-35-53.B: Lessor s Exchange of Investments in Leases... Subtopic 840-30 86 Paragraph 840-30-S35-1: General... Subtopic 840-30 88 Derecognition Paragraphs 840-30-40-1 through 40-5: Lessees... Subtopic 840-30 89 Interpretation 840-30-40-1.A: Gain on Termination of a Capital Lease... Subtopic 840-30 90 Paragraphs 840-30-40-6 through 40-9: Lessors... Subtopic 840-30 91 Interpretation 840-30-40-8.A: Sales of Lease Receivables... Subtopic 840-30 91 Interpretation 840-30-40-8.B: Sale of Residual Interests Before Lease Termination... Subtopic 840-30 94 Interpretation 840-30-40-8.C: Nonrecourse Debt Collateralized by Lease Receivables and/or Leased Assets... Subtopic 840-30 96 Interpretation 840-30-40-8.D: Sale of Lease Receivables with Recourse... Subtopic 840-30 96 Other Presentation Matters Paragraphs 840-30-45-1 through 45-3: Lessees... Subtopic 840-30 98 Paragraphs 840-30-45-4 through 45-7: Lessors... Subtopic 840-30 99 Interpretation 840-30-45-5.A: Statement of Cash Flows... Subtopic 840-30 100 Interpretation 840-30-45-5.B: Leveraged Leases in a Classified Balance Sheet... Subtopic 840-30 101 Contents xviii 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-30-45-5.C: Presentation of the Investment Tax Credit by a Leveraged Lessor in the Income Statement...Subtopic 840-30 101 Disclosure Paragraphs 840-30-50-1 through 50-3: Lessees...Subtopic 840-30 102 Paragraphs 840-30-50-4: Lessors...Subtopic 840-30 103 Paragraphs 840-30-50-5 through 50-6: Lessors...Subtopic 840-30 104 Illustrations Paragraphs 840-30-55-1 through 55-13: Lessees...Subtopic 840-30 105 Implementation Guidance Paragraphs 840-30-55-14 through 55-16: Lessors...Subtopic 840-30 109 Interpretation 840-30-55-15.A: Delayed Equity Contributions...Subtopic 840-30 109 Paragraphs 840-30-55-17 through 55-21: Lessors...Subtopic 840-30 110 Illustrations Paragraphs 840-30-55-22 through 55-56: Lessors...Subtopic 840-30 111 Interpretation 840-30-55-51.A: Accounting for a Leveraged Lease in a Business Combination...Subtopic 840-30 129 Paragraphs 840-30-55-57 through 55-60: Lessors...Subtopic 840-30 130 Implementation Guidance Paragraphs 840-30-S55-1: General...Subtopic 840-30 132 SEC Materials Paragraph 840-30-S99-1 and S99-2: General...Subtopic 840-30 133 Leases Sale-Leaseback Transactions (840-40) Status Paragraph 840-40-00-1: General...Subtopic 840-40 1 Overview and Background Paragraphs 840-40-05-1 through 05-6: General...Subtopic 840-40 2 Paragraph 840-40-05-7: Lessees...Subtopic 840-40 3 Paragraph 840-40-05-8: Lessors...Subtopic 840-40 4 Paragraphs 840-40-05-9 through 05-11: Real Estate...Subtopic 840-40 5 6/11 2011 CCH. All rights reserved. Contents xix

Accounting for Leases Scope and Scope Exceptions Paragraph 840-40-15-1: General... Subtopic 840-40 6 Paragraph 840-40-15-2: General... Subtopic 840-40 7 Paragraphs 840-40-15-3 through 15-6: Lessees... Subtopic 840-40 8 Paragraph 840-40-15-7: Lessors... Subtopic 840-40 9 Paragraphs 840-40-15-8 through 15-10: Real Estate... Subtopic 840-40 10 Interpretation 840-40-15-9.A: Sale-Leaseback Involving an Insignificant Amount of Real Estate... Subtopic 840-40 11 Interpretation 840-40-15-9.B: Minor Leasebacks... Subtopic 840-40 11 Interpretation 840-40-15-9.C: Lease of Real Estate Assets in a Business Combination... Subtopic 840-40 11 Interpretation 840-40-15-9.D: Sale with an Option to Lease... Subtopic 840-40 12 Interpretation 840-40-15-9.E: Bifurcation of Land and Building... Subtopic 840-40 12 Interpretation 840-40-15-9.F: Contribution-Leasebacks, Spin-Off-Leasebacks, Exchange-Leasebacks, and Lease-Leasebacks... Subtopic 840-40 13 Interpretation 840-40-15-9.G: Transfer of an Option to Purchase Property to a Developer... Subtopic 840-40 15 Interpretation 840-40-15-9.H: Rental Shortfall Agreements... Subtopic 840-40 15 Topical Definitions Section 840-40-20: Glossary... Subtopic 840-40 17 Section 840-40-S20: Glossary... Subtopic 840-40 21 Recognition Paragraph 840-40-25-1: General... Subtopic 840-40 22 Paragraph 840-40-25-2: Lessees... Subtopic 840-40 23 Interpretation 840-40-25-2.A: Sale-Leaseback of Real Estate and Equipment... Subtopic 840-40 23 Paragraphs 840-40-25-3 through 25-4: Lessees... Subtopic 840-40 24 Interpretation 840-40-25-3.A: Fair Value of Property in a Sale-Leaseback Transaction... Subtopic 840-40 24 Interpretation 840-40-25-3.B: Effect of Actual Rents vs. Reasonable Rents on Gain Recognition... Subtopic 840-40 25 Contents xx 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-40-25-3.C: Effect of Sale-Leaseback-Sublease Structure on Amount of Gain to Be Amortized...Subtopic 840-40 26 Interpretation 840-40-25-3.D: Seller-Lessee Treatment of Third-Party Indemnification Costs of a Residual Value Guarantee...Subtopic 840-40 26 Interpretation 840-40-25-3.E: Sale of Equipment Subject to an Existing Intra-entity Lease in a Sale-Leaseback...Subtopic 840-40 27 Interpretation 840-40-25-3.F: Property Sold to a Party That Leases Different Property to Seller...Subtopic 840-40 27 Interpretation 840-40-25-3.G: Multiple Properties Sold and Leased Back From the Same Lessor...Subtopic 840-40 28 Interpretation 840-40-25-3.H: Lessee Obligation or Option to Buy Back Equipment Subject to Lessor s Ability to Obtain Debt Financing...Subtopic 840-40 28 Interpretation 840-40-25-3.I: Meaning of Substantially All...Subtopic 840-40 29 Interpretation 840-40-25-3.J: Indicated Losses...Subtopic 840-40 29 Interpretation 840-40-25-3.K: Potential Tax Consequences of Lease Termination or Expiration in a Sale-Leaseback...Subtopic 840-40 30 Paragraphs 840-40-25-5 through 25-7: Lessees...Subtopic 840-40 31 Paragraph 840-40-25-8: Lessors...Subtopic 840-40 32 Paragraphs 840-40-25-9 through 25-10: Real Estate...Subtopic 840-40 33 Interpretation 840-40-25-9.A: Sale-Leaseback of Real Estate and Sale of Condominium Interest Involving the Same Buyer...Subtopic 840-40 33 Interpretation 840-40-25-10.A: Substantially Different Terms...Subtopic 840-40 34 Paragraph 840-40-25-11: Real Estate...Subtopic 840-40 35 Interpretation 840-40-25-11.A: Appropriate Interest Rate to Apply under the Financing Method...Subtopic 840-40 35 Paragraphs 840-40-25-12 through 25-18: Real Estate...Subtopic 840-40 37 Interpretation 840-40-25-12.A: Option to Repurchase the Property...Subtopic 840-40 38 Interpretation 840-40-25-12.B: Right of First Offer...Subtopic 840-40 39 Interpretation 840-40-25-12.C: Lease Payments Accelerate in an Event of Default...Subtopic 840-40 39 6/11 2011 CCH. All rights reserved. Contents xxi

Accounting for Leases Interpretation 840-40-25-12.D: Form of Continuing Involvement Held by Parent or Other Related Entity... Subtopic 840-40 40 Interpretation 840-40-25-12.E: Tax Indemnifications and Other Participation in Buyer-Lessor s Tax Consequences... Subtopic 840-40 40 Interpretation 840-40-25-12.F: Contingent Forms of Continuing Involvement... Subtopic 840-40 41 Interpretation 840-40-25-12.G: Changes in the Nature of the Seller-Lessee s Involvement... Subtopic 840-40 41 Interpretation 840-40-25-12.H: Effect of Seller-Lessee Assuming Property Risks during the Lease Term... Subtopic 840-40 42 Interpretation 840-40-25-12.I: Perpetual Fixed Price Renewal Options... Subtopic 840-40 43 Interpretation 840-40-25-12.J: Seller Retains Ownership of Underlying Land... Subtopic 840-40 43 Interpretation 840-40-25-12.K: Hell or High Water Clauses... Subtopic 840-40 44 Interpretation 840-40-25-12.L: Effect of Lessee s Indemnities on Sale-Leaseback Accounting... Subtopic 840-40 44 Interpretation 840-40-25-12.M: Sale-Leaseback of Real Estate Subject to a Power Sale Agreement... Subtopic 840-40 45 Interpretation 840-40-25-12.N: Decommissioning Liability for Nuclear Power Plants... Subtopic 840-40 46 Interpretation 840-40-25-12.O: Indemnity for Lessor Becoming a Public Utility Holding Entity... Subtopic 840-40 46 Interpretation 840-40-25-13.A: Purchase Option in Renewal Term Only... Subtopic 840-40 46 Interpretation 840-40-25-13.B: Economic Obsolescence Clause... Subtopic 840-40 47 Interpretation 840-40-25-14.A: Effect of an Uncollateralized Irrevocable Letter of Credit... Subtopic 840-40 47 Interpretation 840-40-25-14.B: Meaning of Related Party... Subtopic 840-40 49 Interpretation 840-40-25-14.C: Meaning of Nonrecourse Financing... Subtopic 840-40 49 Interpretation 840-40-25-17.A: Forms of Continuing Involvement Under Subtopic 840-40, but Not under Subtopic 360-20... Subtopic 840-40 50 Interpretation 840-40-25-17.B: Contingent Rents... Subtopic 840-40 51 Contents xxii 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-40-25-18.A: Partial Sales of Real Estate...Subtopic 840-40 52 Interpretation 840-40-25-18.B: Lessee Participation in Lessor s Interest Savings...Subtopic 840-40 52 Initial Measurement Paragraphs 840-40-30-1 through 30-6: Lessees...Subtopic 840-40 54 Interpretation 840-40-30-5.A: Consideration of Executory Costs in Sale-Leasebacks...Subtopic 840-40 54 Subsequent Measurement Paragraphs 840-40-35-1 through 35-3: Lessees...Subtopic 840-40 55 Interpretation 840-40-35-1.A: Effect of Changed Circumstances on Profit Amortization Over Leaseback...Subtopic 840-40 55 Paragraph 840-40-35-4: Lessees...Subtopic 840-40 56 Other Presentation Matters Section 840-40-45:...Subtopic 840-40 57 Interpretation 840-40-45.A: Balance Sheet Classification of Deferred Gain on Sale-Capital-Leaseback...Subtopic 840-40 57 Disclosure Paragraph 840-40-50-1: Lessees...Subtopic 840-40 58 Paragraph 840-40-50-2: Real Estate...Subtopic 840-40 59 Interpretation 840-40-50-2.A: Partial Sales of Real Estate Balance Sheet Characterization...Subtopic 840-40 59 Implementation Guidance Paragraphs 840-40-55-1 through 55-15: Lessees...Subtopic 840-40 60 Interpretation 840-40-55-15.A: Indemnifications and Guarantees in Build-to-Suit Lease Agreements...Subtopic 840-40 65 Interpretation 840-40-55-15.B: Indemnification for Acts Beyond the Lessee s Control...Subtopic 840-40 67 Interpretation 840-40-55-15.C: Lessee Indemnification of General Contractors and Subcontractors...Subtopic 840-40 67 Interpretation 840-40-55-15.D: Distinguishing Between Down Payments and Purchase Options...Subtopic 840-40 67 Interpretation 840-40-55-15.E: Costs Incurred by Lessee s Equity Investee...Subtopic 840-40 68 Interpretation 840-40-55-15.F: Arrangements That Require a Lessee to Post Collateral...Subtopic 840-40 69 6/11 2011 CCH. All rights reserved. Contents xxiii

Accounting for Leases Interpretation 840-40-55-15.G: Lessee s Obligation to Obtain Insurance for a Build-to-Suit Project... Subtopic 840-40 69 Interpretation 840-40-55-15.H: Effect of Unreimbursed Soft Costs on Whether Lessee is Owner of a Build-to-Suit Project... Subtopic 840-40 70 Interpretation 840-40-55-15.I: Effect of Construction Cost Overruns on Maximum Guarantee Test... Subtopic 840-40 70 Interpretation 840-40-55-15.J: Determining the Fair Value of a Completed Build-to-Suit Asset... Subtopic 840-40 71 Interpretation 840-40-55-15.K: Effect of a Ground Lease During the Construction Term... Subtopic 840-40 71 Interpretation 840-40-55-15.L: Determining Whether an Investment in a Lessor Is an Investment in Real Estate... Subtopic 840-40 72 Interpretation 840-40-55-15.M: Effect of Lessee Renewal Options on Applicability of Build-to-Suit Guidance... Subtopic 840-40 72 Paragraphs 840-40-55-16 through 55-24: Lessees... Subtopic 840-40 73 Interpretation 840-40-55-22.A: Accounting by Seller and Purchaser if Purchaser Leases Property Back to Seller When the Operating Lease Expires... Subtopic 840-40 74 Paragraphs 840-40-55-25 through 55-28: Lessees... Subtopic 840-40 76 Interpretation 840-40-55-26.A: Effect of a Residual Value Guarantee on Profit Recognition in an Equipment Sale-Leaseback... Subtopic 840-40 76 Paragraphs 840-40-55-29 through 55-34: Lessees... Subtopic 840-40 78 Paragraphs 840-40-55-35 through 55-36: Lessees... Subtopic 840-40 79 Interpretation 840-40-55-35.A: Master Leases... Subtopic 840-40 79 Interpretation 840-40-55-35.B: Subleases to Related Parties... Subtopic 840-40 79 Interpretation 840-40-55-35.C: Measurement Issues Related to Subleasing... Subtopic 840-40 80 Paragraphs 840-40-55-37 through 55-41: Lessees... Subtopic 840-40 82 Interpretation 840-40-55-37.A: Accounting for the Sale of Property Subject to the Seller s Pre-Existing Lease... Subtopic 840-40 82 Paragraphs 840-40-55-42 through 55-47: Lessees... Subtopic 840-40 84 Interpretation 840-40-55-42.A: Build-to-Suit Transactions Costs Incurred by the Lessee and Transfers of Options Held... Subtopic 840-40 84 Contents xxiv 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Interpretation 840-40-55-42.B: Lessee s Transfer of an Option to Acquire Property Currently under Lease...Subtopic 840-40 85 Paragraph 840-40-55-48: Lessees...Subtopic 840-40 87 Illustrations Paragraphs 840-40-55-49 through 55-53: Lessees...Subtopic 840-40 88 Interpretation 840-40-55-52.A: Meaning of Sale-Leaseback Accounting...Subtopic 840-40 90 Paragraphs 840-40-55-54 through 55-62: Lessees...Subtopic 840 94 Interpretation 840-40-55-54.A: Application of the Deposit Method...Subtopic 840-40 98 Paragraphs 840-40-55-63 through 55-70: Lessees...Subtopic 840-40 100 Interpretation 840-40-55-63.A: Application of the Financing Method...Subtopic 840-40 104 Paragraphs 840-40-55-71 through 55-94: Lessees...Subtopic 840-40 107 Implementation Guidance Paragraphs 840-40-S55-1 through S55-3: General...Subtopic 840-40 112 SEC Materials Paragraph 840-40-S99-1 through 840-40-S99-3: General...Subtopic 840-40 113 6/11 2011 CCH. All rights reserved. Contents xxv

Accounting for Leases INDUSTRY TOPICS AND INTERPRETATIONS Leases Not-for-Profit Entities (958-840) Overview and Background Paragraph 958-840-05-1: General... Subtopic 958-840 1 Scope and Scope Exceptions Paragraph 958-840-15-1: General... Subtopic 958-840 2 Topical Definitions Section 958-840-20: Glossary... Subtopic 958-840 3 Implementation Guidance Paragraphs 958-840-55-1 through 55-4: General... Subtopic 958-840 5 Leases Real Estate-Real Estate Investment Trusts (974-840) Overview and Background Paragraph 974-840-05-1: General... Subtopic 974-840 1 Scope and Scope Exceptions Paragraph 974-840-15-1: General... Subtopic 974-840 2 Topical Definitions Section 974-840-20: Glossary... Subtopic 974-840 3 Recognition Paragraph 974-840-25-1: General... Subtopic 974-840 4 Interpretation 974-840-25-1.A: Costs Incurred by a Service Corporation on Behalf of a Real Estate Investment Trust... Subtopic 974-840 4 Leases Real Estate TimeSharing Activities (978-840) Overview and Background Paragraph 978-840-05-1: General... Subtopic 978-840 1 Scope and Scope Exceptions Paragraphs 978-840-15-1 through 15-XX: General... Subtopic 978-840 2 Topical Definitions Section 978-840-20: Glossary... Subtopic 978-840 3 Contents xxvi 6/11 2011 CCH. All rights reserved.

Accounting for Leases Table of Contents Recognition Paragraphs 978-840-25-1 through 25-2: General...Subtopic 978-840 4 Leases Regulated Operations (980-840) Overview and Background Paragraph 980-840-05-1: General...Subtopic 980-840 1 Scope and Scope Exceptions Paragraph 980-840-15-1: General...Subtopic 980-840 2 Topical Definitions Section 980-840-20: Glossary...Subtopic 980-840 3 Recognition Paragraphs 980-840-25-1 through 25-2: General...Subtopic 980-840 4 Subsequent Measurement Paragraphs 980-840-35-1 through 35-2: General...Subtopic 980-840 5 Other Presentation Matters Paragraphs 980-840-45-1 through 45-4: General...Subtopic 980-840 6 Implementation Guidance Paragraph 980-840-55-1: General...Subtopic 980-840 7 APPENDICES Appendix I: Index of Accounting Literature Cited... Appendix I 1 6/11 2011 CCH. All rights reserved. Contents xxvii

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