Document ID: chunk:federal_register_of_legislation:F2024C00049:body:0:p25
Version: federal_register_of_legislation:F2024C00049
Segment Type: other
Provision Reference: 
Character Range: 62780–65726

underlying asset                                    An asset that is the subject of a lease, for which the right to use that asset has been provided by a lessor to a lessee.
unearned finance income                             The difference between:
                                                    (a) the gross investment in the lease; and
                                                    (b) the net investment in the lease.
unguaranteed residual value                         That portion of the residual value of the underlying asset, the realisation of which by a lessor is not assured or is guaranteed solely by a party related to the lessor.
variable lease payments                             The portion of payments made by a lessee to a lessor for the right to use an underlying asset during the lease term that varies because of changes in facts or circumstances occurring after the commencement date, other than the passage of time.

Terms defined in other Standards and used in this Standard with the same meaning
contract     An agreement between two or more parties that creates enforceable rights and obligations.
useful life  The period over which an asset is expected to be available for use by an entity; or the number of production or similar units expected to be obtained from an asset by an entity.

Appendix B
Application guidance
This appendix is an integral part of the Standard. It describes the application of paragraphs 1–103 and has the same authority as the other parts of the Standard.

Portfolio application
B1 This Standard specifies the accounting for an individual lease. However, as a practical expedient, an entity may apply this Standard to a portfolio of leases with similar characteristics if the entity reasonably expects that the effects on the financial statements of applying this Standard to the portfolio would not differ materially from applying this Standard to the individual leases within that portfolio. If accounting for a portfolio, an entity shall use estimates and assumptions that reflect the size and composition of the portfolio.

Combination of contracts
B2 In applying this Standard, an entity shall combine two or more contracts entered into at or near the same time with the same counterparty (or related parties of the counterparty), and account for the contracts as a single contract if one or more of the following criteria are met:
(a) the contracts are negotiated as a package with an overall commercial objective that cannot be understood without considering the contracts together;
(b) the amount of consideration to be paid in one contract depends on the price or performance of the other contract; or
(c) the rights to use underlying assets conveyed in the contracts (or some rights to use underlying assets conveyed in each of the contracts) form a single lease component as described in paragraph B32.

Recognition exemption: leases for which the underlying asset