What it is
A lessor that classifies a lease as sales-type derecognizes the underlying asset, records a net investment in the lease and recognizes selling profit at commencement. Interest income then accrues on the net investment at the rate implicit in the lease.
This workbook measures the lease receivable, the present value of the unguaranteed residual, sales revenue, cost of sales and selling profit. It builds the monthly schedule, proves the net investment reaches the residual value at the end of the term, and writes the entries.
When to use it
- At commencement of a lease you have classified as sales-type, to measure profit and post the entry.
- Monthly, to record collections and interest income.
- When preparing lessor disclosures and the support for the net investment balance.
What’s inside
- Terms, implicit rate, guaranteed and unguaranteed residual values, carrying amount and direct costs
- Lease receivable, net investment, revenue, cost of sales and selling profit
- Monthly schedule for up to 120 months
- Commencement entry and a monthly entry for any period you pick
- Residual and interest checks
Standard cited
This template follows ASC 842. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
How is selling profit measured?
Sales revenue is the lease receivable, which is the present value of the lease payments plus the present value of any guaranteed residual. Cost of sales is the carrying amount of the underlying asset less the present value of the unguaranteed residual. Selling profit is revenue less cost of sales.
What is the net investment in the lease?
The lease receivable plus the present value of the unguaranteed residual value. It accretes at the implicit rate and reaches the total residual value at the end of the term.
How are initial direct costs treated?
For a sales-type lease that produces selling profit, initial direct costs are expensed at commencement. The workbook includes them in the commencement entry as selling expense.
Does this workbook classify the lease?
No. Classification comes from your lessor classification analysis. Use this schedule only for a lease you have concluded is sales-type.
Related templates
- ASC 842 Lease Schedule (Lessee)
- ASC 842 Lease Classification Test Worksheet
- ASC 842 Lease Journal Entries Workbook (Lessee)
- Disclosure Checklist: Leases (ASC 842), Lessee and Lessor
Last updated 11/05/2026. All free templates.