ASC

ASC 840-30

Capital Leases

840 Leases

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In brief

IntermediateLeasesTransition and effective datesRecognitionSubsequent measurement

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 Every paragraph in this subtopic has been superseded — almost entirely by ASU 2016-02 (Leases, which created ASC 842), with 840-30-25-5 superseded by ASU 2014-09 (Revenue).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.

Key points (5)
  • All Sections of 840-30 (05, 15, 25, 30, 35, 40, 45, 50, and 55) consist solely of paragraphs superseded by Accounting Standards Update No. 2016-02, which replaced Topic 840 with Topic 842.
  • One paragraph, 840-30-25-5, was superseded by Accounting Standards Update No. 2014-09 (Revenue from Contracts with Customers), reflecting the removal of legacy revenue-related lease guidance.
  • 840-30-35-37 is designated 'Paragraph not used,' so no guidance ever resided there.
  • Because no operative text remains, entities that have adopted ASC 842 must look to 842-20 (lessee) and 842-30 (lessor) for finance lease and sales-type/direct financing lease accounting rather than to 840-30.
  • The subtopic remains in the Codification only as a historical marker; it may still be relevant to periods presented before an entity's adoption of ASU 2016-02, whose transition provisions are in 842-10-65-1.

For students. Know that 840-30 is dead letter: the capital lease/direct financing/sales-type model lives on only in comparative periods and in exam questions contrasting old and new GAAP. The common mistake is citing 840-30 for current lessee or lessor accounting instead of ASC 842-20 and 842-30.

capital leasedirect financing leasesales-type leasesuperseded guidanceminimum lease paymentsfinance leaseleases transition

Machine-generated study aid for ASC 840-30. Check the source paragraphs below.

840-30-00Status

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840-30-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
AcquireeSupersededAccounting Standards Update No. 2016-0202/25/2016
AcquirerSupersededAccounting Standards Update No. 2016-0202/25/2016
Acquisition by a Not-for-Profit EntitySupersededAccounting Standards Update No. 2016-0202/25/2016
Acquisition by a Not-for-Profit EntityAddedAccounting Standards Update No. 2010-0701/28/2010
Advance RefundingSupersededAccounting Standards Update No. 2016-0202/25/2016
Bargain Purchase OptionSupersededAccounting Standards Update No. 2016-0202/25/2016
Bargain Renewal OptionSupersededAccounting Standards Update No. 2016-0202/25/2016
BusinessAmendedAccounting Standards Update No. 2017-0101/05/2017
BusinessSupersededAccounting Standards Update No. 2016-0202/25/2016
Business CombinationSupersededAccounting Standards Update No. 2016-0202/25/2016
Capital LeaseSupersededAccounting Standards Update No. 2016-0202/25/2016
Contingent RentalsSupersededAccounting Standards Update No. 2016-0202/25/2016
Delayed Equity InvestmentSupersededAccounting Standards Update No. 2016-0202/25/2016
Direct Financing LeaseAmendedAccounting Standards Update No. 2021-0507/19/2021
Direct Financing LeasesSupersededAccounting Standards Update No. 2016-0202/25/2016
Estimated Economic LifeSupersededAccounting Standards Update No. 2016-0202/25/2016
Estimated Residual ValueSupersededAccounting Standards Update No. 2016-0202/25/2016
Financing ReceivableSupersededAccounting Standards Update No. 2016-0202/25/2016
Financing ReceivableAddedAccounting Standards Update No. 2010-2007/21/2010
Indirectly Related to the Leased PropertySupersededAccounting Standards Update No. 2016-0202/25/2016
Interest MethodSupersededAccounting Standards Update No. 2016-0202/25/2016
LeaseSupersededAccounting Standards Update No. 2016-0202/25/2016
Lease InceptionSupersededAccounting Standards Update No. 2016-0202/25/2016
Lease TermSupersededAccounting Standards Update No. 2016-0202/25/2016
Legal EntitySupersededAccounting Standards Update No. 2016-0202/25/2016
Leveraged LeaseSupersededAccounting Standards Update No. 2016-0202/25/2016
Money-Over-Money LeaseSupersededAccounting Standards Update No. 2016-0202/25/2016
Noncancelable Lease TermSupersededAccounting Standards Update No. 2016-0202/25/2016
Nonrecourse FinancingSupersededAccounting Standards Update No. 2016-0202/25/2016
Not-for-Profit EntitySupersededAccounting Standards Update No. 2016-0202/25/2016
Operating LeaseSupersededAccounting Standards Update No. 2016-0202/25/2016
Original LesseeSupersededAccounting Standards Update No. 2016-0202/25/2016
PenaltySupersededAccounting Standards Update No. 2016-0202/25/2016
Sales-Type LeaseAmendedAccounting Standards Update No. 2021-0507/19/2021
Sales-Type LeaseSupersededAccounting Standards Update No. 2016-0202/25/2016
SubleaseSupersededAccounting Standards Update No. 2016-0202/25/2016
Substantially AllSupersededAccounting Standards Update No. 2016-0202/25/2016
Variable Interest EntitySupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-05-1 through 05-4
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-15-1 through 15-3
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-25-1 through 25-4
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-25-4AmendedAccounting Standards Update No. 2014-0905/28/2014
840-30-25-5SupersededAccounting Standards Update No. 2014-0905/28/2014
840-30-25-6 through 25-10
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-25-6AmendedAccounting Standards Update No. 2014-0905/28/2014
840-30-25-10AmendedAccounting Standards Update No. 2010-0701/28/2010
840-30-30-1 through 30-15
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-30-15AmendedAccounting Standards Update No. 2010-0701/28/2010
840-30-35-1 through 35-53
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-35-14AmendedAccounting Standards Update No. 2010-0701/28/2010
840-30-35-32AmendedAccounting Standards Update No. 2010-0701/28/2010
840-30-40-1 through 40-9
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-40-2AmendedAccounting Standards Update No. 2014-0905/28/2014
840-30-40-5AmendedAccounting Standards Update No. 2014-0905/28/2014
840-30-45-1AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-45-1 through 45-7
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-45-3AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-45-7AmendedAccounting Standards Update No. 2010-0701/28/2010
840-30-50-1AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-50-1 through 50-6
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-50-2AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-50-4AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-50-4AAddedAccounting Standards Update No. 2010-2007/21/2010
840-30-50-5AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-50-5AAddedAccounting Standards Update No. 2010-2007/21/2010
840-30-55-1 through 55-60
SupersededAccounting Standards Update No. 2016-0202/25/2016
840-30-55-29AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-55-34AmendedMaintenance Update 2016-11 (PDF)06/27/2016
840-30-55-50AmendedAccounting Standards Update No. 2010-0701/28/2010

840-30-05Overview and Background

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Lessees

Lessors

840-30-15Scope and Scope Exceptions

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Lessees

Lessors

840-30-25Recognition

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Lessees

Lessors

840-30-30Initial Measurement

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Lessees

Lessors

840-30-35Subsequent Measurement

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Lessees

Lessors

840-30-40Derecognition

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Lessees

Lessors

840-30-45Other Presentation Matters

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Lessees

Lessors

840-30-50Disclosure

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Lessees

Lessors

840-30-55Implementation Guidance and Illustrations

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Lessees

Lessors

840-30-S00StatusSEC

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840-30-S00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
840-30-S35-1SupersededAccounting Standards Update No. 2017-1309/29/2017
840-30-S55-1SupersededAccounting Standards Update No. 2017-1309/29/2017
840-30-S99-1SupersededAccounting Standards Update No. 2017-1309/29/2017
840-30-S99-1AmendedAccounting Standards Update No. 2010-0401/15/2010
840-30-S99-2SupersededAccounting Standards Update No. 2017-1309/29/2017
840-30-S99-2AmendedAccounting Standards Update No. 2009-0709/15/2009

840-30-S35Subsequent MeasurementSEC

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840-30-S55Implementation Guidance and IllustrationsSEC

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840-30-S99SEC MaterialsSEC

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Related subtopics