The lease payment data should be updated to include amounts allocated to lease components under ASC 842 (for example, property taxes and insurance related to the leased asset should be included in the contract consideration and allocated to lease components). If the entity is not electing the hindsight practical expedient, this allocation would start with the same lease payment data as used under ASC 840 (for example, reflecting the same lease term as what was used under ASC 840). When the reporting entity does not apply the package of practical expedients, it will need to reallocate consideration as of the lease commencement date for any contract that contains a lease component in order to reassess lease classification. An entity that applies this method must provide the required disclosures under ASC 840 for all periods to which ASC 840 is applied. Prior comparative periods would be not be adjusted under this method. Do not adjust comparative periods: Apply the guidance to each lease that had commenced as of the beginning of the reporting period in which the entity first applies the leases standard (referred to as the “application date” or the “effective date” under this method) with a cumulative-effect adjustment as of that date.The period from the beginning of the earliest comparative period up until immediately before the effective date is referred to as the “look-back period.” For leases that commenced prior to the beginning of the earliest comparative period presented, a cumulative effect adjustment is recognized at that date. Under this method, prior comparative periods presented are adjusted.
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