Other lessor costs paid directly by the lessee to a third party ( LG 2.4.1): ASC 842 requires a lessor to present a variable payment not included in contract consideration that is even partially related to a lease component on a gross basis in its income statement, i.e., it needs to be separately reported as revenue and expense.Lessors are required to disclose their accounting policy election. Taxes assessed on a lessor’s gross receipts or on the lessor as owner of the underlying asset are excluded. Examples of taxes eligible for this policy election include sales, use, value added, and some excise taxes.
Taxes ( LG 2.4.1): ASC 842 permits lessors to gross up the income statement by presenting (1) sales or other similar taxes in revenue when such taxes are reimbursed by a lessee to the lessor and (2) the associated tax payment to the taxing authorities as expense. However, lessors can also make an accounting policy election to exclude from revenue and associated expense such taxes assessed by a governmental authority provided they are (a) imposed on and concurrent with a specific lease revenue-producing transaction, and (b) collected by the lessor from the lessee. This election is available irrespective of whether the taxes are a lessee or lessor cost.LG 2 addresses certain concepts that impact the presentation in the income statement, including: Transfers and servicing of financial assets Revenue from contracts with customers (ASC 606) Loans and investments (post ASU 2016-13 and ASC 326) Investments in debt and equity securities (pre ASU 2016-13)
Insurance contracts for insurance entities (pre ASU 2018-12) Insurance contracts for insurance entities (post ASU 2018-12) IFRS and US GAAP: Similarities and differences Business combinations and noncontrolling interestsĮquity method investments and joint ventures
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