When the acquiree may have acted as a lessorAgain, the classification of the lease is not changed unless the terms are changed. For operating leases, the acquiree has the asset recorded on its balance...

When the acquiree may have acted as a lessor—Again, the classification of the lease is not changed unless the terms are changed. For operating leases, the acquiree has the asset recorded on its balance sheet. The asset is recorded at fair value, and it is not impacted by the terms of any lease applicable to that asset. If the terms of the operating lease include rental rates that are different than current rental rates, an intangible asset or estimated liability is recorded. An intangible asset would be recorded for favorable lease terms, and an estimated liability would be recorded for unfavorable terms. Note that the lessor terms are favorable when the contract rental rate exceeds fair rental value, and terms are unfavorable when the fair rental value exceeds the contract rate. The value of the intangible asset or estimated liability uses the same procedure as illustrated for the lessee above.

If the lease is a capital lease, the acquiree has no asset recorded other than the minimum lease payments receivable account. This account would be remeasured at the discounted present value of the payments at the current market interest rate for such a transaction.