eBook
Separating Lease & Non-Lease Components
Lease and non-lease components
Under the new standards, when reporting a lease, companies have the option of choosing whether or not to separate out lease and non-lease components by asset class. Read our guide to understand your options for separating the components.
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Learn about the lease and non-lease component practical expedient
- Pros and cons
- Components to a real estate lease
- The deal structure
- The valuation
- Sample calculation
Capitalizing more on
the balance sheet
Potentially triggering
a finance lease
Potentially triggering
an impairment
Components of a real estate lease
The costs that may be included in a lease tend to fall into three different categories, a lease component, which transfers the right to use the underlying asset, a non-lease component, which transfers a good or service that is not required for use of the underlying asset, and costs that are not considered components because they do not transfer a good or service.
