ASU 2021-09 — Leases (Topic 842)—Discount Rate for Lessees That Are Not Public Business Entities

The amendments in this Update allow a lessee that is not a public business entity to elect an accounting policy to use a risk-free rate as its discount rate by class of underlying asset rather than at an entity-wide level, as is currently required by Topic 842, Leases.

The amendments in this Update also require that when the rate implicit in the lease is readily determinable for any individual lease, the lessee would use that rate (rather than a risk-free rate or an incremental borrowing rate), regardless of whether it has made the risk-free rate election.

This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2021-003—Leases (Topic 842)—Discount Rate for Lessees That Are Not Public Business Entities, which has been deleted.

Issued: November 11, 2021