The Hidden Lease Test: Who Controls the Asset?
Identify whether a contract contains a lease by testing identified asset, economic benefits, and direction of use.
The move: test control before you trust the label. A lease can sit inside a contract that looks like outsourcing, logistics, data center hosting, or maintenance. The accounting question is not whether Legal called it a lease. The question is whether the customer controls the use of an identified asset for a period of time in exchange for consideration. Use three gates. Gate 1: the asset must be identified. It can be named directly, such as Truck 44 or Suite 8B, or implied because the supplier cannot practically use another asset to fulfill the contract. Gate 2: the customer must…
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