# ASC 842-30-30: Leases — Lessor — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/842/30/#30-initial-measurement) 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. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T01:57:17.907Z to 2026-09-10T01:57:17.907Z Record version: sha256:afa93cdb7c709be1d252d885e5d344a37cd15927c2f0e633e387b058ccf22756 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 842-30-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/842/30/#30-initial-measurement) SEC content: no #### Sales-Type and Direct Financing Leases ##### [842-30-30-1](https://asc.understandingaccounting.org/asc/842/30/#842-30-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:57:17.907Z to 2026-09-10T01:57:17.907Z Record version: sha256:325ad66519be2348c75494e5ab244db51b86e3152f858acddf034c27e8f847ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the [commencement date](https://asc.understandingaccounting.org/glossary/c/#commencement-date-of-the-lease-commencement-date "The date on which a lessor makes an underlying asset available for use by a lessee. See paragraphs 842-10-55-19842-10-55-20842-10-55-21 for implementation guidance on the commencement date."), for a [sales-type lease](https://asc.understandingaccounting.org/glossary/s/#sales-type-lease "From the perspective of a lessor, a lease that meets one or more of the criteria in paragraph 842-10-25-2 and is not an operating lease in accordance with paragraph 842-10-25-3A."), a [lessor](https://asc.understandingaccounting.org/glossary/l/#lessor "An entity that enters into a contract to provide the right to use an underlying asset for a period of time in exchange for consideration.") shall measure the [net investment in the lease](https://asc.understandingaccounting.org/glossary/n/#net-investment-in-the-lease "For a sales-type lease, the sum of the lease receivable and the unguaranteed residual asset. For a direct financing lease, the sum of the lease receivable and the unguaranteed residual asset, net of any deferred selling profit.") to include both of the following: 1. a The [lease receivable](https://asc.understandingaccounting.org/glossary/l/#lease-receivable "A lessor's right to receive lease payments arising from a sales-type lease or a direct financing lease plus any amount that a lessor expects to derive from the underlying asset following the end of the lease term to the extent that it is guaranteed by the lessee or any other third party unrelated to the lessor, measured on a discounted basis."), which is measured at the present value, discounted using the [rate implicit in the lease](https://asc.understandingaccounting.org/glossary/r/#rate-implicit-in-the-lease "The rate of interest that, at a given date, causes the aggregate present value of (a) the lease paymentsand (b) the amount that a lessor expects to derive from the underlying asset following the end of the lease termto equal the sum of (1) the fair value of the underlying asset minus any related investment tax credit retained and expected to be realized by the lessor and (2) any deferred initial direct costs of the lessor. However, if the rate determined in accordance with the preceding sentence is less than zero, a rate implicit in the lease of zero shall be used."), of: 1. 1 The [lease payments](https://asc.understandingaccounting.org/glossary/l/#lease-payments "See paragraph 842-10-30-5 for what constitutes lease payments from the perspective of a lessee and a lessor.") (as described in paragraph [842-10-30-5](https://asc.understandingaccounting.org/asc/842/10/#842-10-30-5)) not yet received by the lessor 2. 2 The amount the lessor expects to derive from the [underlying asset](https://asc.understandingaccounting.org/glossary/u/#underlying-asset "An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset.") following the end of the [lease term](https://asc.understandingaccounting.org/glossary/l/#lease-term "The noncancellable period for which a lessee has the right to use an underlying asset, together with all of the following: Periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option Periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option Periods covered by an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the lessor.") that is guaranteed by the [lessee](https://asc.understandingaccounting.org/glossary/l/#lessee "An entity that enters into a contract to obtain the right to use an underlying asset for a period of time in exchange for consideration.") or any other third party unrelated to the lessor 2. b The [unguaranteed residual asset](https://asc.understandingaccounting.org/glossary/u/#unguaranteed-residual-asset "The amount that a lessor expects to derive from the underlying asset following the end of the lease term that is not guaranteed by the lessee or any other third party unrelated to the lessor, measured on a discounted basis.") at the present value of the amount the lessor expects to derive from the underlying asset following the end of the lease term that is not guaranteed by the lessee or any other third party unrelated to the lessor, discounted using the rate implicit in the lease. ##### [842-30-30-2](https://asc.understandingaccounting.org/asc/842/30/#842-30-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:57:17.907Z to 2026-09-10T01:57:17.907Z Record version: sha256:5e31631db101543fdd17f2a073e5c83542078bbea8bbaca65c45830d59d29b79 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the commencement date, for a [direct financing lease](https://asc.understandingaccounting.org/glossary/d/#direct-financing-lease "From the perspective of a lessor, a lease that meets none of the criteria in paragraph 842-10-25-2 but meets the criteria in paragraph 842-10-25-3(b)and is not an operating lease in accordance with paragraph 842-10-25-3A."), a lessor shall measure the net investment in the lease to include the items in paragraph [842-30-30-1(a) through (b)](https://asc.understandingaccounting.org/asc/842/30/#842-30-30-1), reduced by the amount of any selling profit. ##### [842-30-30-3](https://asc.understandingaccounting.org/asc/842/30/#842-30-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:57:17.907Z to 2026-09-10T01:57:17.907Z Record version: sha256:99b3f89555d539a04977dff8618d97b40822b2bafea1fe136ffaa059a0e03494 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraphs [842-30-55-18 through 55-43](https://asc.understandingaccounting.org/asc/842/30/#842-30-55-18) ) for an illustration of the requirements for sales-type and direct financing leases. #### Operating Leases ##### [842-30-30-4](https://asc.understandingaccounting.org/asc/842/30/#842-30-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:57:17.907Z to 2026-09-10T01:57:17.907Z Record version: sha256:bbefe51b918369829d02c0b3f777eb233afb68ec1818f319968978cc15298e46 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [lessor](https://asc.understandingaccounting.org/glossary/l/#lessor "An entity that enters into a contract to provide the right to use an underlying asset for a period of time in exchange for consideration.") shall continue to measure the [underlying asset](https://asc.understandingaccounting.org/glossary/u/#underlying-asset "An asset that is the subject of a lease for which a right to use that asset has been conveyed to a lessee. The underlying asset could be a physically distinct portion of a single asset.") subject to an [operating lease](https://asc.understandingaccounting.org/glossary/o/#operating-lease "From the perspective of a lessee, any lease other than a finance lease. From the perspective of a lessor, any lease other than a sales-type lease or a direct financing lease.") in accordance with other Topics.