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Leasing
Lease accounting covers the rules for contracts that give a customer the right to control the use of an identified asset for a period of time in exchange for consideration. In the US, the standard is ASC 842; internationally, IFRS 16. For lessees, the standards brought most leases onto the balance sheet. For lessors, the core question is classification: under ASC 842, a lease is a sales-type, direct financing, or operating lease; IFRS 16 distinguishes finance and operating leases. That classification decides whether the asset stays on the books or is replaced by a receivable, how income is recognized, and what a system has to calculate. For US companies that lease out equipment – often bundled with service – this is where accounting and SAP design meet.
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Leasing
Lease-Out Explained: What Lessors Need to Know under ASC 842 and IFRS 16
An introduction to lessor accounting under ASC 842 and IFRS 16 – lease types, what happens at commencement, income patterns, and the data lessors need.
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Leasing
Lessor Accounting in SAP RAR without Additional Software
How lessors can account for ASC 842 and IFRS 16 leases in SAP RAR, alongside ASC 606 service and product revenue, without a separate leasing system.
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Leasing
IFRS 16 vs. ASC 842: Key Differences for Lessors
Lessor accounting under ASC 842 and IFRS 16 looks similar, but classification, selling profit, collectibility and practical expedients differ. An overview for finance and SAP teams.
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Leasing
Operating vs. Finance Lease: How Classification Drives Accounting
For lessors, lease classification determines balance sheet, income pattern and system design. How operating and finance leases differ under ASC 842 and IFRS 16.
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Leasing
Leases in Bundled Contracts: Separating Lease and Non-Lease Components
Equipment, service and financing in one contract – how lessors separate lease and non-lease components under ASC 842 and IFRS 16, and what it means for SAP.
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What You'll Find Here
Our leasing articles focus on the lessor side, with selected topics for lessees. They explain how ASC 842 and IFRS 16 differ for lessors, how classification drives the accounting, and how to separate lease and non-lease components in bundled contracts. Further articles cover lease modifications and reclassification, variable lease payments, residual value guarantees, sale-and-leaseback transactions, lease term and purchase options, initial direct costs, and subleases. Two explainers – lease-in and lease-out – give a compact overview of what lessees and lessors each need to know.
Key Questions We Cover
• Does a service or "as-a-service" contract contain an embedded lease?
• Why can the same contract be classified differently under ASC 842 and IFRS 16?
• How is the consideration in a bundle allocated between the lease and the service?
• What happens to classification and measurement when a lease is extended, upgraded, or terminated early?
How This Connects to SAP
For lessors, Revident runs lease accounting in SAP Revenue Accounting and Reporting (RAR) – without additional software. Lease and non-lease components can sit in one revenue accounting contract, the transaction price is allocated across them, and each component follows its own recognition pattern. Operating leases stay close to the standard; the interest and principal split for finance leases requires customer-specific logic in RAR. This brings revenue and lessor accounting into one process instead of two separate systems.
We apply our method – Discover. Engineer. Validate. Operate. – with human-governed automation: AI agents support contract analysis and testing, while specialists decide on classification and accounting treatment.
Start Here
• IFRS 16 vs. ASC 842: Key Differences for Lessors
• Operating vs. Finance Lease: How Classification Drives Accounting
• Leases in Bundled Contracts: Separating Lease and Non-Lease Components
Running lessor accounting under ASC 842 and IFRS 16 in SAP? Talk to our experts.
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