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64.

Amend paragraph 840-30-30-15 and its

related

heading,

with

a

link

to

transition paragraph 958-805-65-1, as follows:

  • >

    > Leveraged Lease Acquired in a Business Combination or an

Acquisition by a Not-for-Profit Entity

840-30-30-15 In a business combination or an acquisition by a not-for-profit entity, the acquiring entity shall assign an amount to the acquired net investment in the leveraged lease in accordance with the general guidance in Topic 805, based on the remaining future cash flows and giving appropriate recognition to the estimated future tax effects of those cash flows.

65.

Amend paragraph 840-30-35-14, with no change to transition, as follows:

840-30-35-14 The termination of a capital lease that results from the purchase of a leased asset by the lessee is not the type of termination of a capital lease contemplated by paragraph 840-30-40-1 but rather is an integral part of the purchase of the leased asset. If the lessee purchases property leased under a capital lease, any difference between the purchase price and the carrying amount of the capital lease obligation shall be recorded by the lessee as an adjustment of the carrying amount of the asset. However, this paragraph does not apply to leased assets acquired in a business combination or an acquisition by a not-for-profit entity, [FIN 26, paragraph 5, sequence 12.2.2] which are initially measured at fair value in accordance with paragraph 805-20-30-1.

66.

Amend paragraph 840-30-35-32 and its

related

heading,

with

a

link

to

transition paragraph 958-805-65-1, as follows:

  • >

    > Leveraged Lease Acquired in a Business Combination or an

Acquisition by a Not-for-Profit Entity

840-30-35-32 In a business combination or an acquisition by a not-for-profit entity, the acquiring entity shall subsequently account for its acquired investment as a lessor in a leveraged lease in accordance with the guidance in this Subtopic as for any other leveraged lease. Example 5 (see paragraph 840-30-55- 50) illustrates an acquiring entity’s accounting for its acquired investment as a lessor in a leveraged lease.

67.

Amend paragraph 840-30-45-7, with a link to transition paragraph 958-805-

65-1, as follows:

840-30-45-7 This Subtopic requires that the tax effect of any difference between the assigned value and the tax basis of a leveraged lease at the date of a business combination or an acquisition by a not-for-profit entity [FAS 109, paragraph 259, sequence 761.1.1] shall not be accounted for as a deferred tax credit. Any tax effects included in unearned and deferred income as required by this Subtopic shall not be offset by the deferred tax consequences of other temporary differences or by the tax benefit of operating loss or tax credit

98

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