Wiley Not-for-Profit GAAP 2017

28Accounting for Leases

1. Perspective and Issues
   1. Lessee Accounting
   2. Lessor Accounting
   3. Definition of a Lease
   4. Components
   5. Effective Date
2. Definitions of Terms
3. Concepts, Rules, and Examples
   1. Classification of Leases—Lessee
   2. Classification of Leases—Lessor
   3. Distinction between Sales-Type, Direct Financing, and Leveraged Leases
   4. Accounting for Leases—Lessee
   5. Accounting for Leases—Lessor
   6. Special Situations
   7. Sale-Leaseback Transactions
   8. Sale-leaseback involving real estate
   9. Reporting of Current and Noncurrent Lease Receivable (Lessor) and Lease Obligations (Lessee)
4. Disclosure Requirements
   1. Disclosure Requirements—Lessees
   2. Disclosure Requirements—Lessors

Perspective and Issues

Lease transactions have grown in popularity over the years as many organizations look for new ways to finance their fixed asset additions. Leases have grown increasingly popular for office equipment, including PCs, photocopiers, and telephone systems. For not-for-profit organizations, leases for such items offer a way to finance asset “acquisitions” relatively easily, while spreading the cost of the equipment over the period that it is used; a good technique for tight annual budget requirements. The concepts contained in this chapter for the calculation of the present value of a capital lease are essentially the same as those that would be used by a not-for-profit organization to calculate the present value of a long-term pledge of the use of property. Chapter 9 provides more information on recording contributions. A lease ...