Expand
Resize
Add to favorites
On July 19, 2021, the FASB published ASU 2021-05, Leases (Topic 842): Lessors—Certain Leases with Variable Lease Payments, which upon adoption requires a lessor to classify a lease with variable lease payments (that do not depend on a rate or index) as an operating lease on commencement date if classifying the lease as a sales-type or direct financing lease would result in a selling loss.
Figure LG 10-3 summarizes the effective dates for adopting ASU 2021-05. Early adoption is permitted for both public and nonpublic business entities.
Figure LG 10-3
ASU 2021-05 effective dates
Type of entity
Effective date
Public business entities

A not-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or over-the-counter market

An employee benefit plan that files or furnishes financial statements to the SEC
  • Fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021

All other entities not included above
  • Fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022
Entities that have not yet adopted ASC 842 on or before the issuance of ASU 2021-05 (i.e., July 19, 2021) should adopt ASU 2021-05 at the same time as ASC 842 and use the same transition method used to adopt ASC 842 (i.e., adjust comparative periods with the cumulative effect of transition recognized at the beginning of the earliest period presented, or with the cumulative effect of transition recognized at the beginning of the period of adoption and no adjustment of comparative periods). See LG 10.3 for transition methods available for ASC 842.
Entities that have adopted ASC 842 on or before the issuance of ASU 2021-05 (i.e., July 19, 2021) should apply ASU 2021-05 either (1) retrospectively to leases that commenced or were modified (where the modification is not accounted for as a separate contract under ASC 842-10-25-8) on or after the adoption of ASC 842, or (2) prospectively to leases that commence or are modified (where the modification is not accounted for as a separate contract under ASC 842-10-25-8) on or after the date that an entity first applies the ASU.
Expand

Welcome to Viewpoint, the new platform that replaces Inform. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory.

Your session has expired

Please use the button below to sign in again.
If this problem persists please contact support.

signin option menu option suggested option contentmouse option displaycontent option contentpage option relatedlink option prevandafter option trending option searchicon option search option feedback option end slide