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To the Point - FASB allows nonpublic lessees to make the risk-free rate election by class of underlying asset


Overview

The FASB amended ASC 842 to allow a lessee that is not a public business entity to elect to use a risk-free rate as its discount rate by class of underlying asset, rather than for all leases as originally required by ASC 842. It also requires lessees to use the rate implicit in the lease when it is readily determinable, even if they make the risk-free rate election.

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