# ASC 842-50-35: Leases — Leveraged Lease Arrangements — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/842/50/#35-subsequent-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): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:6bdb3ce916d358df732f0fc1636f15b97bb842b848aeeef8f8974a95bf5ae285 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 842-50-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/842/50/#35-subsequent-measurement) SEC content: no #### Leveraged Lease Acquired in a Business Combination or an Acquisition by a Not-for-Profit Entity ##### [842-50-35-1](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:3b400b32de60753a2b15d267a65f4ccafb35eaf71859f3b984bb0d9ad7c6040c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a business combination or an [acquisition by a not-for-profit entity](https://asc.understandingaccounting.org/glossary/a/#acquisition-by-a-not-for-profit-entity "A transaction or other event in which a not-for-profit acquirer obtains control of one or more nonprofit activities or businesses and initially recognizes their assets and liabilities in the acquirer's financial statements. When applicable guidance in Topic 805 is applied by a not-for-profit entity, the term business combination has the same meaning as this term has for a for-profit entity. Likewise, a reference to business combinations in guidance that links to Topic 805 has the same meaning as a reference to acquisitions by not-for-profit entities."), the acquiring entity shall subsequently account for its acquired investment as 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.") in a [leveraged lease](https://asc.understandingaccounting.org/glossary/l/#leveraged-lease "From the perspective of a lessor, a lease that was classified as a leveraged lease in accordance with the leases guidance in effect before the effective date and for which the commencement date is before the effective date.") in accordance with the guidance in this Subtopic as it would for any other leveraged lease. #### Income Recognition on a Leveraged Lease ##### [842-50-35-2](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:0aef6b2b8ef64adb51a14e9c9bc9eee6b162e9090f39d03b7396560b7ce83448 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The investment in [leveraged leases](https://asc.understandingaccounting.org/glossary/l/#leveraged-lease "From the perspective of a lessor, a lease that was classified as a leveraged lease in accordance with the leases guidance in effect before the effective date and for which the commencement date is before the effective date.") minus deferred taxes arising from differences between pretax accounting income and taxable income shall represent the [lessor's](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.") 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](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration."), 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. ##### [842-50-35-3](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:dcf82d47d01c5a1ef20ec127b45fb7691dea4196430009503423ac8cb1067b14 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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). ##### [842-50-35-4](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:f4231bf055e87ab9b0907c1fe2f1eb95dff62338127338a1182ca5b37f7d7b26 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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)](https://asc.understandingaccounting.org/asc/842/50/#842-50-30-1)). 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. ##### [842-50-35-5](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:47af9f6c829c9fe75d42b32c386327d2a84e8fdd583ea021194e05ad8766479d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, at any time during 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.") 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](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-6) ). ##### [842-50-35-6](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:ba8040cd9a97c0169764a40b347266b8cb2c07ff87af369cf514d925f5913251 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any [estimated residual value](https://asc.understandingaccounting.org/glossary/e/#estimated-residual-value "The estimated fair value of the leased property at the end of the lease term.") and all other important assumptions affecting estimated total net income from the [leveraged lease](https://asc.understandingaccounting.org/glossary/l/#leveraged-lease "From the perspective of a lessor, a lease that was classified as a leveraged lease in accordance with the leases guidance in effect before the effective date and for which the commencement date is before the effective date.") 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](https://asc.understandingaccounting.org/glossary/l/#lease-inception "The date of the lease agreement or commitment, if earlier. For purposes of this definition, a commitment shall be in writing, signed by the parties in interest to the transaction, and shall specifically set forth the principal provisions of the transaction. If any of the principal provisions are yet to be negotiated, such a preliminary agreement or commitment does not qualify for purposes of this definition.") following the method described in paragraphs [842-50-35-2 through 35-4](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-2) and using the revised assumption if, during 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."), 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](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration."). 3. c The projected timing of the income tax cash flows is revised. ##### [842-50-35-7](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:66bd238aff17deda27ecb78b26d97a140bc720850afda966b239c574bc53ea0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [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 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. ##### [842-50-35-8](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:187aac2fbc40adb13348e4143f8f03a7fc696c3ff31a8d21719606650e371ddf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [842-50-35-9](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:d30da50256c3d2831386b59fc084d91cc1f530ee9a9bdf55025949b3664769d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [842-50-35-10](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:5563fbd983896ddf998071e522fd13a56a9b04fc55c45452046d2bf0872048cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [842-50-35-11](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:b35a5a69fbee17fdd6c430a0b038ef5275023990b934bcf8c45b9223a3a73f82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In contrast, as discussed in paragraph [842-50-35-20](https://asc.understandingaccounting.org/asc/842/50/#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. ##### [842-50-35-12](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:e8fb9b7c20e144df4a9269ba99cad7293c0d8dff7e0d9b8a05598acf81e88c99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/740/10/#740-10-25-6), [740-10-30-7](https://asc.understandingaccounting.org/asc/740/10/#740-10-30-7), and [740-10-40-2](https://asc.understandingaccounting.org/asc/740/10/#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. ##### [842-50-35-13](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:f31f79dd995d908baad0bd660afa7c4a5ca720ee66cc7c8d04e48e3369828257 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [842-50-35-14](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:b9bbdf1a7eccf3db7e794f227226b757ac781ab9295746e7dc4b16213c7197c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The recalculation of income from the leveraged lease shall not include interest or penalties in the cash flows from the leveraged lease. ##### [842-50-35-15](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:0bcb6664b5256cff97d46d5f441f111ace01adc618f22b568ac7a2f7aed50778 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. #### Effect of Alternative Minimum Tax ##### [842-50-35-16](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:f5119705dbc47b89eefe300fc395d9f52868f6893b5b7090d048d6ba1f467df8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall include assumptions about the effect of the alternative minimum tax, considering its consolidated tax position, in [leveraged lease](https://asc.understandingaccounting.org/glossary/l/#leveraged-lease "From the perspective of a lessor, a lease that was classified as a leveraged lease in accordance with the leases guidance in effect before the effective date and for which the commencement date is before the effective date.") computations. ##### [842-50-35-17](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:6cde3d7f9ef1f3c654771a5bbfdd8669c3b9e5f4b13fbb85c6a99db922aa0a09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](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.") overall tax situation, result in alternative minimum tax or the utilization of alternative minimum tax credits. ##### [842-50-35-18](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:29e8dc4759117236fc291e1509bec4811713edd7857173793a3bdc8739a943a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [842-50-35-19](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:189d9f9dc376baa9e97c11097d1b50cf6a65e008540370d39ba06196e5285b03 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. ##### [842-50-35-20](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:2bf9b02f8ee293db01e32685257e6a0db81e57f847709142bd458817445dce66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") 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. #### Transfer of Minimum Rental Payments ##### [842-50-35-21](https://asc.understandingaccounting.org/asc/842/50/#842-50-35-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:58:19.548Z to 2026-09-10T01:58:19.548Z Record version: sha256:77ad3e8d44694652ee2380ca9a4db0f1e987b43e5b197e5cf2bb26afec2cbc2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If 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.") sells substantially all of the minimum rental payments associated with a [leveraged lease](https://asc.understandingaccounting.org/glossary/l/#leveraged-lease "From the perspective of a lessor, a lease that was classified as a leveraged lease in accordance with the leases guidance in effect before the effective date and for which the commencement date is before the effective date.") and retains an interest in the residual value of the leased asset, the lessor shall not recognize increases in the value of the [lease](https://asc.understandingaccounting.org/glossary/l/#lease "A contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.") residual to its estimated value over the remaining [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."). The lessor shall report any remaining interest thereafter at its carrying amount at the date of the sale of 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."). If it is determined subsequently that the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") 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.