Identifying a Lease

When Does a Contract Contain a Lease?

A contract contains a lease if it conveys the right to control the use of an identified asset for a specified period in exchange for consideration. Control exists when the customer obtains substantially all economic benefits from using the asset and directs how it is used.

• An identified asset must exist.
• The customer controls the asset's use.
• Economic benefits flow primarily to the customer.
• Payment is required for the right of use.