ASC Topic 840
Leases
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ASC 840 was the legacy U.S. GAAP lease model, organized into an Overall subtopic (840-10: scope, capital-versus-operating classification criteria, lease term and minimum lease payments), operating leases (840-20), capital/direct financing/sales-type leases (840-30), sale-leaseback transactions (840-40), and industry intersections for not-for-profits (840-958), time-sharing (840-978), REITs (840-974), and regulated operations (840-980). Every substantive paragraph in all of these subtopics has been superseded — almost entirely by Accounting Standards Update No. 2016-02, which replaced Topic 840 with Topic 842, plus a handful of paragraphs (e.g., 840-10-60-3, 840-20-40-3 and 40-4, 840-30-25-5) superseded by ASU 2014-09 (Topic 606). The single most important point is that ASC 840 contains no operative guidance: current lease recognition, measurement, presentation, and disclosure must be found in Topic 842 (842-20 for lessees, 842-30 for lessors, 842-40 for sale-leasebacks, with transition in 842-10-65-1). Topic 840 survives only as a historical shell — some paragraph numbers are even marked "not used" (e.g., 840-10-55-11, 840-30-35-37) — relevant for comparative pre-adoption periods and transition analysis.
Subtopics
- 10Overall194 ¶
ASC 840-10 was the "Overall" subtopic of the legacy U.S. GAAP lease model, containing the scope, lease classification criteria (capital vs. operating), lease term and minimum lease payment definitions, and related implementation guidance for both lessees and lessors. Every substantive paragraph in this subtopic has been superseded by Accounting Standards Update No. 2016-02 (and one paragraph, 840-10-60-3, by ASU 2014-09), which replaced Topic 840 with Topic 842. As currently codified, 840-10 contains no operative guidance.
- 20Operating Leases56 ¶
ASC 840-20 formerly contained the legacy accounting for operating leases by lessees and lessors, but every paragraph in the subtopic has been superseded and it now carries no operative guidance. The bulk of the supersessions were made by ASU 2016-02, which replaced Topic 840 with Topic 842, while two derecognition paragraphs (840-20-40-3 and 840-20-40-4) were superseded by ASU 2014-09 on revenue. Readers seeking current operating lease rules must consult Topic 842.
- 30Capital Leases175 ¶
ASC 840-30 was the legacy guidance governing lessee accounting for capital leases and lessor accounting for direct financing and sales-type leases (recognition, initial measurement of the leased asset and obligation at the present value of minimum lease payments, subsequent interest and amortization, terminations/renewals, presentation, and disclosure). Every paragraph in this subtopic has been superseded — almost entirely by ASU 2016-02 (Leases, which created ASC 842), with 840-30-25-5 superseded by ASU 2014-09 (Revenue). As a result, 840-30 contains no operative guidance for entities that have adopted ASC 842.
- 40Sale-Leaseback Transactions153 ¶
ASC 840-40 was the legacy sale-leaseback guidance under the old lease model, addressing when a seller-lessee could recognize a sale of property it simultaneously leased back and how any gain or loss was deferred and amortized. Every substantive paragraph in the subtopic (Sections 05, 15, 25, 30, 35, 50, and 55) has been superseded by ASU 2016-02, so the subtopic now contains no operative guidance. Sale-leaseback transactions are instead accounted for under ASC 842-40, which conditions sale recognition on satisfying the transfer-of-control requirements in ASC 606.
- 958Not-for-Profit Entities7 ¶
ASC 840-958 was the not-for-profit-specific guidance within the legacy leases topic (ASC 840), addressing how NFP entities applied lease accounting. Every remaining paragraph in this subtopic (05-1, 15-1, and 55-1 through 55-4) has been superseded by Accounting Standards Update No. 2016-02, so the subtopic contains no operative guidance. NFP lessees and lessors now follow ASC 842, including its NFP-specific provisions.
- 974Real Estate—Real Estate Investment Trusts4 ¶
This subtopic previously provided lease guidance specific to real estate investment trusts (REITs) within the legacy leases topic (ASC 840). All of its content — the overview (05-1), scope (15-1), and recognition (25-1) paragraphs — was superseded by ASU 2016-02, which replaced ASC 840 with ASC 842. There is accordingly no substantive guidance remaining here.
- 978Real Estate—Time-Sharing Activities5 ¶
ASC 840-978 was the intersection subtopic applying the old lease accounting model (Topic 840) to real estate time-sharing activities (Topic 978). Every paragraph in its Overview, Scope, and Recognition sections has been superseded by ASU 2016-02, the standard that replaced Topic 840 with Topic 842. As a result, the subtopic contains no remaining substantive guidance.
- 980Regulated Operations13 ¶
This subtopic formerly provided lease guidance specific to regulated operations (rate-regulated utilities) under the old lease model in ASC 840 — for example, how capital lease accounting interacted with regulator-prescribed rate-making treatment. Every paragraph in every section (05, 15, 25, 35, 45, 55) has been superseded by ASU 2016-02 (Leases (Topic 842)), so the subtopic contains no operative guidance. Lessees and lessors in regulated operations now apply ASC 842, together with the regulated-operations guidance in ASC 980 (including ASC 842-10 and 980-340/980-405 concepts on regulatory assets and liabilities).