ASC 840-980
Regulated Operations
840 Leases
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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 Every paragraph in every section (05, 15, 25, 35, 45, 55) has been superseded by ASU 2016-02 (Leases (Topic 842)), so the subtopic contains no operative guidance.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).
Key points (5)
- All paragraphs of 840-980 (840-980-05-1, 15-1, 25-1 through 25-3, 35-1 and 35-2, 45-1 through 45-4, and 55-1) are marked 'superseded by Accounting Standards Update No. 2016-02,' leaving no effective guidance in the subtopic.
- ASU 2016-02 replaced Topic 840 with Topic 842, so lease transactions of rate-regulated entities are analyzed under ASC 842's right-of-use asset/lease liability model rather than the former capital/operating lease distinction.
- Entities that have adopted ASC 842 should not cite 840-980; it is retained in the Codification only as a historical marker of superseded text.
- Rate-regulated entities continue to consider whether the difference between GAAP lease cost and amounts allowed for rate-making purposes gives rise to a regulatory asset or regulatory liability under Topic 980.
- Because Topic 840 remains relevant only for periods before adoption of ASU 2016-02, this subtopic can matter for comparative or legacy-period financial statements and transition analysis.
For students. Exam-wise, the only thing to know here is that this subtopic is fully superseded by ASU 2016-02 — the common mistake is citing 840-980 for a utility lease question instead of ASC 842 plus the regulatory asset/liability guidance in Topic 980.
Machine-generated study aid for ASC 840-980. Check the source paragraphs below.
840-980-00Status
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| Paragraph | Action | Accounting Standards Update | Date |
| Allowable Costs | Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 |
| Phase-In Plan | Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 |
| 980-840-05-1 | Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 |
| 980-840-15-1 | Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 |
| Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 | |
| 980-840-35-1 | Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 |
| 980-840-35-2 | Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 |
| Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 | |
| 980-840-55-1 | Amended | Maintenance Update 2016-11 (PDF) | 06/27/2016 |
| 980-840-55-1 | Superseded | Accounting Standards Update No. 2016-02 | 02/25/2016 |
840-980-05Overview and Background
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840-980-15Scope and Scope Exceptions
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840-980-25Recognition
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840-980-35Subsequent Measurement
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840-980-45Other Presentation Matters
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840-980-55Implementation Guidance and Illustrations
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