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FASB ASU 2021-05, Lessors—Certain Leases with Variable Lease Payments

Targeted Topic 842 amendment for a lessor lease that would otherwise be sales type or direct financing but would recognize a day one selling loss because of excluded variable payments.

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About this authority

Publisher
Financial Accounting Foundation
Standing
Primary authority
Version
ASU 2021-05
Relevant parts
Topic 842 lessor classification amendment for certain variable-payment leases
Currency
current · checked Aug 8, 2026

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When the amendment's specified variable-payment and day-one-loss conditions both hold, the lessor routes the lease to operating accounting. The exception belongs on the classification evidence board before a net-investment schedule is released.