Lessee Accounting Example under ASC 842
ASC 842 Leases provides two models for accounting for lease contracts for the lessee: the operating lease model and the finance lease model. How does the lessee determine which model to apply? How does the lessee initially measure the lease? What about subsequent recognition and measurement? Let’s explore those answers with a worked example of accounting for a lease contract by the lessee under ASC 842.
Topics covered include:
- Initial recognition and measurement
- Subsequent measurement for finance leases
- Subsequent measurement for operating leases
