The following shows the steps to take when moving from an Operating Lease to a Type B Lease.
Reminder: The above simply outlines the steps. If you have further questions or need a lease accounting software solution, please visit leasequery.com
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The following decision tree shows how to determine if a service contract has an embedded lease. Click here for a detailed explanation of the decision tree. It explains in detail implicit and explicit identification, right of substitution and transfer of control.
The tree above helps you determine if there is a lease embedded within a service contract. For a detailed explanation of this lease decision tree (including a discussion on implicit and explicit identification, explanation of the concept of transfer of control, and the right of substitution), click here.