{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/842/10/#35-subsequent-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.","topic":"842","topic_title":"Leases","subtopic":"842-10","subtopic_title":"Overall","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":"Lease Term and Purchase Options","paragraphs":[{"citation":"842-10-35-1","para":"35-1","html":"
A lessee shall reassess the lease term or a lessee option to purchase the underlying asset only if and at the point in time that any of the following occurs:
  1. a
    There is a significant event or a significant change in circumstances that is within the control of the lessee that directly affects whether the lessee is reasonably certain to exercise or not to exercise an option to extend or terminate the lease or to purchase the underlying asset.
  2. b
    There is an event that is written into the contract that obliges the lessee to exercise (or not to exercise) an option to extend or terminate the lease.
  3. c
    The lessee elects to exercise an option even though the entity had previously determined that the lessee was not reasonably certain to do so.
  4. d
    The lessee elects not to exercise an option even though the entity had previously determined that the lessee was reasonably certain to do so.
","snippet":"A lessee shall reassess the lease term or a lessee option to purchase the underlying asset only if and at the point in time that any of the following occurs:\n(a) There is a significant event or a significant change in ci…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:51bb295b7780fa3ae0743a8b22d230d5700d9558efbcee9374a343ec54570b74","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}},{"citation":"842-10-35-2","para":"35-2","html":"
See paragraphs
842-10-55-28 through 55-29
for implementation guidance on reassessing the lease term and lessee options to purchase the underlying asset.
","snippet":"See paragraphs 842-10-55-28 through 55-29 for implementation guidance on reassessing the lease term and lessee options to purchase the underlying asset.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:18a1135ee46a0878d53134328e61d22fb147e544d38ca35330f3bc1def2fd3f7","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}},{"citation":"842-10-35-3","para":"35-3","html":"
A lessor shall not reassess the lease term or a lessee option to purchase the underlying asset unless the lease is modified and that modification is not accounted for as a separate contract in accordance with paragraph 842-10-25-8. When a lessee exercises an option to extend the lease or purchase the underlying asset that the lessor previously determined the lessee was not reasonably certain to exercise or exercises an option to terminate the lease that the lessor previously determined the lessee was reasonably certain not to exercise, the lessor shall account for the exercise of that option in the same manner as a lease modification.
","snippet":"A lessor shall not reassess the lease term or a lessee option to purchase the underlying asset unless the lease is modified and that modification is not accounted for as a separate contract in accordance with paragraph 8…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a8b7ca2fb3773ff48ec43cb988bb9ac1fc449cb37512aa0d6054a3b9bc831163","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8091d0c81b857fb3d8b1445d686b791da302561cd4b8d54c8dc2fa8093f69157","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}},{"block":null,"heading":"Subsequent Measurement of the Lease Payments","paragraphs":[{"citation":"842-10-35-4","para":"35-4","html":"
A lessee shall remeasure the lease payments if any of the following occur:
  1. a
    The lease is modified, and that modification is not accounted for as a separate contract in accordance with paragraph 842-10-25-8.
  2. b
    A contingency upon which some or all of the variable lease payments that will be paid over the remainder of the lease term are based is resolved such that those payments now meet the definition of lease payments. For example, an event occurs that results in variable lease payments that were linked to the performance or use of the underlying asset becoming fixed payments for the remainder of the lease term. However, a change in a reference index or a rate upon which some or all of the variable lease payments in the contract are based does not constitute the resolution of a contingency subject to (b) (see paragraph 842-10-35-5 for guidance on the remeasurement of variable lease payments that depend on an index or a rate).
  3. c
    There is a change in any of the following:
    1. 1
      The lease term, as described in paragraph 842-10-35-1. A lessee shall determine the revised lease payments on the basis of the revised lease term.
    2. 2
      The assessment of whether the lessee is reasonably certain to exercise or not to exercise an option to purchase the underlying asset, as described in paragraph 842-10-35-1. A lessee shall determine the revised lease payments to reflect the change in the assessment of the purchase option.
    3. 3
      Amounts probable of being owed by the lessee under residual value guarantees. A lessee shall determine the revised lease payments to reflect the change in amounts probable of being owed by the lessee under residual value guarantees.
","snippet":"A lessee shall remeasure the lease payments if any of the following occur:\n(a) The lease is modified, and that modification is not accounted for as a separate contract in accordance with paragraph 842-10-25-8.\n(b) A cont…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f2e5f9be09a3d4b25a3da897415e5f535e3bee5bd75bb92bd34c0a8ff324106d","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}},{"citation":"842-10-35-5","para":"35-5","html":"
When one or more of the events described in paragraph 842-10-35-4(a) or (c) occur or when a contingency unrelated to a change in a reference index or rate under paragraph 842-10-35-4(b) is resolved, variable lease payments that depend on an index or a rate shall be remeasured using the index or rate as of the date the remeasurement is required.
","snippet":"When one or more of the events described in paragraph 842-10-35-4(a) or (c) occur or when a contingency unrelated to a change in a reference index or rate under paragraph 842-10-35-4(b) is resolved, variable lease paymen…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:670a6c96d6ad696431b1bdcc55916f43339448b667437e1dc099b662f12ee807","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}},{"citation":"842-10-35-6","para":"35-6","html":"
A lessor shall not remeasure the lease payments unless the lease is modified and that modification is not accounted for as a separate contract in accordance with paragraph 842-10-25-8.
","snippet":"A lessor shall not remeasure the lease payments unless the lease is modified and that modification is not accounted for as a separate contract in accordance with paragraph 842-10-25-8.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c4bad606ff9e67204542bab2dc67b90a8ccae02c1d1bded4b9b392ab274bf9fe","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4cf0f352ce5adf23ab2dd9aa0fe5ed31761a37b8f36aa3b70fe068cdce67284a","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fad716b912b1c18aa75b1eaec537f55466c103b4162f0086fb3a716b6d327d73","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:fad716b912b1c18aa75b1eaec537f55466c103b4162f0086fb3a716b6d327d73","downloaded_from":"2026-09-10T01:56:03.256Z","last_downloaded_at":"2026-09-10T01:56:03.256Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479894","source_sha256":"17ac3395b28f6f31f9154da84a3a4a498d3aa79eb6a1d832b50d974c6316c903"}}