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ASC 842 for lessors

Handbook | August 2021

Updated: An executive overview of the lease accounting standard from a lessor’s perspective.

For companies that have not yet adopted the new standard, we highlight key accounting changes and organizational impacts for lessors applying ASC 842.


Lessors in the scope of ASC 842 (ASU 2016-02, ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20, ASU 2019-01, ASU 2019-10, ASU 2020-02, ASU 2020-05, ASU 2021-05).

Relevant dates

Effective datePublic entities and certain other entities*Public NFPs**All other entities

Annual periods – In fiscal years beginning after                                 

Dec 15, 2018

Dec 15, 2019

Dec 15, 2021

Interim periods – In fiscal years beginning after    

Dec 15, 2018

Dec 15, 2019

Dec 15, 2022

Early adoption allowed in fiscal years beginning after




* Includes (1) public business entities; (2) not-for-profits that have issued, or are conduit bond obligors for, securities that are traded, listed or quoted on an exchange or an over-the-counter market (‘Public NFPs’); and (3) employee benefit plans that file financial statements with the SEC.

** That had not issued GAAP-compliant financial statements reflecting the adoption of ASC 842 before June 3, 2020.

Key Impacts:

  • Lessor accounting is not fundamentally changed, but important differences from ASC 840 exist
  • Key aspects of the lessor accounting guidance have been aligned with the guidance in ASC 606 (revenue recognition)
  • Your customers will now be required to recognize all leases, including operating leases, with terms greater than 12 months on their balance sheets
  • Accounting systems, processes and control changes will likely be necessary to comply with the changes to lessor accounting and the increased lessor disclosure requirements
  • Lessors can choose between two transition methods, with additional practical expedients available
Handbook: Leases
Latest edition: Our in-depth guide to ASC 842 – with Q&As, interpretive guidance and examples.

Report contents

  • In a snapshot
  • How could it impact your business?
  • Effective dates
  • The transition approach
  • Lessor accounting model substantially unchanged
  • Other key considerations
  • Key changes from Topic 840
  • Other important changes

Download the document:

Executive Summary

Download PDF

Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

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