{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/842/50/#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":"842-50","subtopic_title":"Leveraged Lease Arrangements","section":{"number":"35","label":"35 Subsequent Measurement","anchor":"35-subsequent-measurement","is_sec":false,"groups":[{"block":null,"heading":"Leveraged Lease Acquired in a Business Combination or an Acquisition by a Not-for-Profit Entity","paragraphs":[{"citation":"842-50-35-1","para":"35-1","html":"
In a business combination or an acquisition by a not-for-profit entity, the acquiring entity shall subsequently account for its acquired investment as a lessor in a leveraged lease in accordance with the guidance in this Subtopic as it would for any other leveraged lease.
","snippet":"In a business combination or an acquisition by a not-for-profit entity, the acquiring entity shall subsequently account for its acquired investment as a lessor in a leveraged lease in accordance with the guidance in this…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:3b400b32de60753a2b15d267a65f4ccafb35eaf71859f3b984bb0d9ad7c6040c","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2ef8fdbc6ef8abc5d03d8240add271cd81fa030b30ff79011385fe227c827fa2","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"block":null,"heading":"Income Recognition on a Leveraged Lease","paragraphs":[{"citation":"842-50-35-2","para":"35-2","html":"
The investment in leveraged leases minus deferred taxes arising from differences between pretax accounting income and taxable income shall represent the lessor's net investment in leveraged leases for purposes of computing periodic net income from the leveraged lease. Given the original investment and using the projected cash receipts and disbursements over the term of the lease, the rate of return on the net investment in the years in which it is positive shall be computed. The rate is that rate that, when applied to the net investment in the years in which the net investment is positive, will distribute the net income to those years and is distinct from the interest rate implicit in the lease. In each year, whether positive or not, the difference between the net cash flow and the amount of income recognized, if any, shall serve to increase or reduce the net investment balance. The use of the term years is not intended to preclude application of the accounting prescribed in this paragraph to shorter accounting periods.
","snippet":"The investment in leveraged leases minus deferred taxes arising from differences between pretax accounting income and taxable income shall represent the lessor's net investment in leveraged leases for purposes of computi…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0aef6b2b8ef64adb51a14e9c9bc9eee6b162e9090f39d03b7396560b7ce83448","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-3","para":"35-3","html":"
The net income (or loss) that a lessor recognizes on a leveraged lease shall be composed of the following three elements:
  1. a
    Pretax lease income (or loss)
  2. b
    Investment tax credit
  3. c
    Tax effect of pretax lease income (or loss).
","snippet":"The net income (or loss) that a lessor recognizes on a leveraged lease shall be composed of the following three elements:\n(a) Pretax lease income (or loss)\n(b) Investment tax credit\n(c) Tax effect of pretax lease income …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dcf82d47d01c5a1ef20ec127b45fb7691dea4196430009503423ac8cb1067b14","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-4","para":"35-4","html":"
The pretax lease income (or loss) and investment tax credit elements shall be allocated in proportionate amounts from the unearned and deferred income included in the lessor's net investment (as described in paragraph 842-50-30-1(d)). The tax effect of the pretax lease income (or loss) recognized shall be reflected in tax expense for the year. The tax effect of the difference between pretax accounting income (or loss) and taxable income (or loss) for the year shall be charged or credited to deferred taxes.
","snippet":"The pretax lease income (or loss) and investment tax credit elements shall be allocated in proportionate amounts from the unearned and deferred income included in the lessor's net investment (as described in paragraph 84…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f4231bf055e87ab9b0907c1fe2f1eb95dff62338127338a1182ca5b37f7d7b26","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-5","para":"35-5","html":"
If, at any time during the lease term the application of the method prescribed in this Subtopic would result in a loss being allocated to future years, that loss shall be recognized immediately. This situation might arise in circumstances in which one of the important assumptions affecting net income is revised (see paragraphs
842-50-35-6 through 35-15
).
","snippet":"If, at any time during the lease term the application of the method prescribed in this Subtopic would result in a loss being allocated to future years, that loss shall be recognized immediately. This situation might aris…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:47af9f6c829c9fe75d42b32c386327d2a84e8fdd583ea021194e05ad8766479d","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-6","para":"35-6","html":"
Any estimated residual value and all other important assumptions affecting estimated total net income from the leveraged lease shall be reviewed at least annually. The rate of return and the allocation of income to positive investment years shall be recalculated from lease inception following the method described in paragraphs
842-50-35-2 through 35-4
and using the revised assumption if, during the lease term, any of the following conditions occur:
  1. a
    The estimate of the residual value is determined to be excessive, and the decline in the residual value is judged to be other than temporary.
  2. b
    The revision of another important assumption changes the estimated total net income from the lease.
  3. c
    The projected timing of the income tax cash flows is revised.
","snippet":"Any estimated residual value and all other important assumptions affecting estimated total net income from the leveraged lease shall be reviewed at least annually. The rate of return and the allocation of income to posit…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ba8040cd9a97c0169764a40b347266b8cb2c07ff87af369cf514d925f5913251","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-7","para":"35-7","html":"
The lessor shall update all assumptions used to calculate total and periodic income if the lessor is performing a recalculation of the leveraged lease. That recalculation shall include actual cash flows up to the date of the recalculation and projected cash flows following the date of recalculation.
","snippet":"The lessor shall update all assumptions used to calculate total and periodic income if the lessor is performing a recalculation of the leveraged lease. That recalculation shall include actual cash flows up to the date of…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:66bd238aff17deda27ecb78b26d97a140bc720850afda966b239c574bc53ea0b","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-8","para":"35-8","html":"
The accounts constituting the net investment balance shall be adjusted to conform to the recalculated balances, and the change in the net investment shall be recognized as a gain or loss in the year in which the assumption is changed. The gain or loss shall be recognized as follows:
  1. a
    The pretax gain or loss shall be included in income from continuing operations before income taxes in the same line item in which leveraged lease income is recognized.
  2. b
    The tax effect of the gain or loss shall be included in the income tax line item.
  3. c
    An upward adjustment of the estimated residual value (including any guaranteed portion) shall not be made.
","snippet":"The accounts constituting the net investment balance shall be adjusted to conform to the recalculated balances, and the change in the net investment shall be recognized as a gain or loss in the year in which the assumpti…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:187aac2fbc40adb13348e4143f8f03a7fc696c3ff31a8d21719606650e371ddf","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-9","para":"35-9","html":"
The projected timing of income tax cash flows generated by the leveraged lease is an important assumption and shall be reviewed annually, or more frequently, if events or changes in circumstances indicate that a change in timing has occurred or is projected to occur. The income effect of a change in the income tax rate shall be recognized in the first accounting period ending on or after the date on which the legislation effecting a rate change becomes law.
","snippet":"The projected timing of income tax cash flows generated by the leveraged lease is an important assumption and shall be reviewed annually, or more frequently, if events or changes in circumstances indicate that a change i…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d30da50256c3d2831386b59fc084d91cc1f530ee9a9bdf55025949b3664769d4","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-10","para":"35-10","html":"
A revision of the projected timing of the income tax cash flows applies only to changes or projected changes in the timing of income taxes that are directly related to the leveraged lease transaction. For example, a change in timing or projected timing of the tax benefits generated by a leveraged lease as a result of any of the following circumstances would require a recalculation because that change in timing is directly related to that lease:
  1. a
    An interpretation of the tax law
  2. b
    A change in the lessor's assessment of the likelihood of prevailing in a challenge by the taxing authority
  3. c
    A change in the lessor's expectations about settlement with the taxing authority.
","snippet":"A revision of the projected timing of the income tax cash flows applies only to changes or projected changes in the timing of income taxes that are directly related to the leveraged lease transaction. For example, a chan…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:5563fbd983896ddf998071e522fd13a56a9b04fc55c45452046d2bf0872048cb","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-11","para":"35-11","html":"
In contrast, as discussed in paragraph 842-50-35-20, a change in timing of income taxes solely as a result of an alternative minimum tax credit or insufficient taxable income of the lessor would not require a recalculation of a leveraged lease because that change in timing is not directly related to that lease. A recalculation would not be required unless there is an indication that the previous assumptions about total after-tax net income from the leveraged lease were no longer valid.
","snippet":"In contrast, as discussed in paragraph 842-50-35-20, a change in timing of income taxes solely as a result of an alternative minimum tax credit or insufficient taxable income of the lessor would not require a recalculati…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b35a5a69fbee17fdd6c430a0b038ef5275023990b934bcf8c45b9223a3a73f82","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-12","para":"35-12","html":"
Tax positions shall be reflected in the lessor's initial calculation or subsequent recalculation on the recognition, measurement, and derecognition criteria in paragraphs 740-10-25-6, 740-10-30-7, and 740-10-40-2. The determination of when a tax position no longer meets those criteria is a matter of individual facts and circumstances evaluated in light of all available evidence.
","snippet":"Tax positions shall be reflected in the lessor's initial calculation or subsequent recalculation on the recognition, measurement, and derecognition criteria in paragraphs 740-10-25-6, 740-10-30-7, and 740-10-40-2. The de…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e8fb9b7c20e144df4a9269ba99cad7293c0d8dff7e0d9b8a05598acf81e88c99","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-13","para":"35-13","html":"
If the lessor expects to enter into a settlement of a tax position relating to a leveraged lease with a taxing authority, the cash flows following the date of recalculation shall include projected cash flows between the date of the recalculation and the date of any projected settlement and a projected settlement amount at the date of the projected settlement.
","snippet":"If the lessor expects to enter into a settlement of a tax position relating to a leveraged lease with a taxing authority, the cash flows following the date of recalculation shall include projected cash flows between the …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f31f79dd995d908baad0bd660afa7c4a5ca720ee66cc7c8d04e48e3369828257","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-14","para":"35-14","html":"
The recalculation of income from the leveraged lease shall not include interest or penalties in the cash flows from the leveraged lease.
","snippet":"The recalculation of income from the leveraged lease shall not include interest or penalties in the cash flows from the leveraged lease.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:b9bbdf1a7eccf3db7e794f227226b757ac781ab9295746e7dc4b16213c7197c5","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-15","para":"35-15","html":"
Advance payments and deposits made with a taxing authority shall not be considered an actual cash flow of the leveraged lease; rather, those payments and deposits shall be included in the projected settlement amount.
","snippet":"Advance payments and deposits made with a taxing authority shall not be considered an actual cash flow of the leveraged lease; rather, those payments and deposits shall be included in the projected settlement amount.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0bcb6664b5256cff97d46d5f441f111ace01adc618f22b568ac7a2f7aed50778","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1208edfbda936080676ca1814ecd2cdacff50cba31f48d3737120539184bf4c4","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"block":null,"heading":"Effect of Alternative Minimum Tax","paragraphs":[{"citation":"842-50-35-16","para":"35-16","html":"
An entity shall include assumptions about the effect of the alternative minimum tax, considering its consolidated tax position, in leveraged lease computations.
","snippet":"An entity shall include assumptions about the effect of the alternative minimum tax, considering its consolidated tax position, in leveraged lease computations.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f5119705dbc47b89eefe300fc395d9f52868f6893b5b7090d048d6ba1f467df8","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-17","para":"35-17","html":"
Any difference between alternative minimum tax depreciation and the tax depreciation assumed in the leveraged lease or between income recognition for financial reporting purposes and alternative minimum tax income could, depending on the lessor's overall tax situation, result in alternative minimum tax or the utilization of alternative minimum tax credits.
","snippet":"Any difference between alternative minimum tax depreciation and the tax depreciation assumed in the leveraged lease or between income recognition for financial reporting purposes and alternative minimum tax income could,…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6cde3d7f9ef1f3c654771a5bbfdd8669c3b9e5f4b13fbb85c6a99db922aa0a09","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-18","para":"35-18","html":"
If alternative minimum tax is paid or an alternative minimum tax credit is utilized, the total cash flows from the leveraged lease could be changed and the lessor's net investment in the leveraged lease and income recognition would be affected.
","snippet":"If alternative minimum tax is paid or an alternative minimum tax credit is utilized, the total cash flows from the leveraged lease could be changed and the lessor's net investment in the leveraged lease and income recogn…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:29e8dc4759117236fc291e1509bec4811713edd7857173793a3bdc8739a943a3","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"citation":"842-50-35-19","para":"35-19","html":"
If a change to the tax assumptions changes total estimated after-tax net income, the rate of return on the leveraged lease shall be recalculated from inception, the accounts constituting the lessor's net investment shall be adjusted, and a gain or loss shall be recognized in the year in which the assumption is changed.
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However, an entity whose tax position frequently varies between alternative minimum tax and regular tax shall not be required to recalculate the rate of return on the leveraged lease each year unless there is an indication that the original assumptions regarding total after-tax net income from the lease are no longer valid. In that circumstance, the entity shall be required to revise the leveraged lease computations in any period in which total net income from the leveraged lease changes because of the effect of the alternative minimum tax on cash flows for the lease.
","snippet":"However, an entity whose tax position frequently varies between alternative minimum tax and regular tax shall not be required to recalculate the rate of return on the leveraged lease each year unless there is an indicati…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2bf9b02f8ee293db01e32685257e6a0db81e57f847709142bd458817445dce66","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:8893d8c62c47502bcee26cc2d7d22b1c0b05b2d278543246777aa93790ac51db","downloaded_from":"2026-09-10T01:58:19.548Z","last_downloaded_at":"2026-09-10T01:58:19.548Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479116","source_sha256":"71b851cee8d5dbc356b775ab3c0e411f3cca4491bbf441fa0e09516e2743293a"}},{"block":null,"heading":"Transfer of Minimum Rental Payments","paragraphs":[{"citation":"842-50-35-21","para":"35-21","html":"
If a lessor sells substantially all of the minimum rental payments associated with a leveraged lease and retains an interest in the residual value of the leased asset, the lessor shall not recognize increases in the value of the lease residual to its estimated value over the remaining lease term. The lessor shall report any remaining interest thereafter at its carrying amount at the date of the sale of the lease payments. If it is determined subsequently that the fair value of the residual value of the leased asset has declined below the carrying amount of the interest retained and that decline is other than temporary, the asset shall be written down to fair value, and the amount of the write-down shall be recognized as a loss. That fair value becomes the asset's new carrying amount, and the asset shall not be increased for any subsequent increase in its fair value before its sale or disposition.
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