--- title: How do I determine Class of Underlying Assets under ASC 842? description: "While ASC 842 does not address what is meant by the phrase “class of underlying assets", two views have emerged: • View 1 — The class of underlying asset is determined on the basis of the physical nat" --- [Skip to content](https://help.occupier.com/knowledge/how-to-determine-class-of-underlying-assets#main-content) English Show submenu for translations [Customer portal](https://help.occupier.com/tickets-view?hsLang=en) ![H-Teal (1).svg\]](https://help.occupier.com/hubfs/H-Teal%20(1).svg) - [Tickets](https://3455891.hs-sites.com/tickets-view) - [Sign out](https://3455891.hs-sites.com/_hcms/mem/logout) Open main navigation Close main navigation - [Tickets](https://3455891.hs-sites.com/tickets-view) - [Sign out](https://3455891.hs-sites.com/_hcms/mem/logout) - English Show submenu for translations - [Customer portal](https://help.occupier.com/tickets-view) Hi there! How can we help? - There are no suggestions because the search field is empty. 1. [Help Center](https://help.occupier.com/knowledge?hsLang=en) 2. [Lease Accounting](https://help.occupier.com/knowledge/lease-accounting?hsLang=en) 3. [Understanding ASC 842, IFRS16, GASB87 and FRS102](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#understanding-asc-842-ifrs16-gasb87-and-frs102) # How do I determine Class of Underlying Assets under ASC 842? While ASC 842 does not address what is meant by the phrase “class of underlying assets", two views have emerged: • **View 1 —** The class of underlying asset is determined on the basis of the physical nature and characteristics of the asset. For example, real estate, manufacturing equipment, and vehicles would all be reasonable classes of underlying assets given their differences in physical nature. Therefore, irrespective of whether there are different types of similar assets (e.g., within the real estate class, there may be retail stores, warehouses, and distribution centers), the class of underlying asset would be limited to the physical nature as described above. • **View 2** — The class of underlying asset is determined on the basis of the risks associated with the asset. While an asset’s physical nature may be similar to that of other assets (e.g., retail stores, warehouses, and distribution centers are all real estate, as discussed above), each has a different purpose and use to the lessee and would therefore have a separate risk profile. Therefore, for example, it could be appropriate for the lessee to disaggregate real estate assets into separate asset classes by “type” of real estate — to the extent that the different types are subject to different risks — when applying the practical expedients in ASC 842-10-15-37 and ASC 842-20-25-2. **Accounting Guidance Referenced:** - Deloitte *A Roadmap to Applying the New Leasing Standard (2020)* 4.3.3.1 - [Getting Started](https://help.occupier.com/knowledge/getting-started?hsLang=en#main-content) - [The Basics](https://help.occupier.com/knowledge/getting-started?hsLang=en#the-basics) - [Occupier Onboarding & Abstraction](https://help.occupier.com/knowledge/getting-started?hsLang=en#occupier-onboarding-abstraction) - [User & Team Management](https://help.occupier.com/knowledge/getting-started?hsLang=en#user-team-management) - [Email & Notification Management](https://help.occupier.com/knowledge/getting-started?hsLang=en#email-notification-management) - [Custom Data Management](https://help.occupier.com/knowledge/getting-started?hsLang=en#custom-data-management) - [Lease Administration](https://help.occupier.com/knowledge/lease-administration?hsLang=en#main-content) - [Equipment Leases](https://help.occupier.com/knowledge/lease-administration?hsLang=en#equipment-leases) - [Change History Log](https://help.occupier.com/knowledge/lease-administration?hsLang=en#change-history-log) - [Clauses](https://help.occupier.com/knowledge/lease-administration?hsLang=en#clauses) - [Document Storage](https://help.occupier.com/knowledge/lease-administration?hsLang=en#document-storage) - [Financials](https://help.occupier.com/knowledge/lease-administration?hsLang=en#financials) - [Creating & Editing a Lease](https://help.occupier.com/knowledge/lease-administration?hsLang=en#creating-editing-a-lease) - [Critical Dates](https://help.occupier.com/knowledge/lease-administration?hsLang=en#critical-dates) - [Lease Column Configurations](https://help.occupier.com/knowledge/lease-administration?hsLang=en#lease-column-configurations) - [Custom Fields](https://help.occupier.com/knowledge/lease-administration?hsLang=en#custom-fields) - [Contacts](https://help.occupier.com/knowledge/lease-administration?hsLang=en#contacts) - [Filtering](https://help.occupier.com/knowledge/lease-administration?hsLang=en#filtering) - [Assets](https://help.occupier.com/knowledge/lease-administration?hsLang=en#assets) - [Lease Data Exports](https://help.occupier.com/knowledge/lease-administration?hsLang=en#lease-data-exports) - [Occupier Analytics Dashboard](https://help.occupier.com/knowledge/lease-administration?hsLang=en#occupier-analytics-dashboard) - [Customizing Data Categories](https://help.occupier.com/knowledge/lease-administration?hsLang=en#customizing-data-categories) - [Lease Admin Overview](https://help.occupier.com/knowledge/lease-administration?hsLang=en#lease-admin-overview) - [Column Configuration & Filtering](https://help.occupier.com/knowledge/lease-administration?hsLang=en#column-configuration-filtering) - [Tasks & Commenting](https://help.occupier.com/knowledge/lease-administration?hsLang=en#tasks-commenting) - [Lease Payables](https://help.occupier.com/knowledge/lease-administration?hsLang=en#lease-payables) - [Lease Data Imports](https://help.occupier.com/knowledge/lease-administration?hsLang=en#lease-data-imports) - [Percentage Rent](https://help.occupier.com/knowledge/lease-administration?hsLang=en#percentage-rent) - [Lease Accounting](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#main-content) - [Understanding ASC 842, IFRS16, GASB87 and FRS102](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#understanding-asc-842-ifrs16-gasb87-and-frs102) - [Account Set-up](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#account-set-up) - [FX Rates](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#fx-rates) - [Recognizing a Lease](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#recognizing-a-lease) - [Impairing a Lease](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#impairing-a-lease) - [Lease Modifications](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#lease-modifications) - [Lease Accounting Reporting](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#lease-accounting-reporting) - [Importing Data Into Accounting](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#importing-data-into-accounting) - [Allocations](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#allocations) - [Close Books Process](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#close-books-process) - [NetSuite Journal Entry Integrations](https://help.occupier.com/knowledge/lease-accounting?hsLang=en#netsuite-journal-entry-integrations) - [Transaction Management](https://help.occupier.com/knowledge/transaction-management?hsLang=en#main-content) - [Task Templates](https://help.occupier.com/knowledge/transaction-management?hsLang=en#task-templates) - [Filtering](https://help.occupier.com/knowledge/transaction-management?hsLang=en#filtering) - [Custom Categories](https://help.occupier.com/knowledge/transaction-management?hsLang=en#custom-categories) - [Deal Column Configurations](https://help.occupier.com/knowledge/transaction-management?hsLang=en#deal-column-configurations) - [Documents](https://help.occupier.com/knowledge/transaction-management?hsLang=en#documents) - [Comps](https://help.occupier.com/knowledge/transaction-management?hsLang=en#comps) - [Deal Stages](https://help.occupier.com/knowledge/transaction-management?hsLang=en#deal-stages) - [Creating & Editing a Deal](https://help.occupier.com/knowledge/transaction-management?hsLang=en#creating-editing-a-deal) - [Site Selection](https://help.occupier.com/knowledge/transaction-management?hsLang=en#site-selection) - [Broker Deals CRM](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#main-content) - [Custom Deal Stages](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#custom-deal-stages) - [Custom Fields](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#custom-fields) - [Broker Deal Exports](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#broker-deal-exports) - [Broker Digest emails](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#broker-digest-emails) - [Critical Date Columns](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#critical-date-columns) - [Creating & Editing a Deal](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#creating-editing-a-deal) - [Comps](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#comps) - [Site Selection](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#site-selection) - [Broker Deal Teams](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#broker-deal-teams) - [Negotiations & Proposals](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#negotiations-proposals) - [Clients Tab](https://help.occupier.com/knowledge/broker-deals-crm?hsLang=en#clients-tab) - [Monthly Release Notes](https://help.occupier.com/knowledge/monthly-release-notes?hsLang=en#main-content) - [2025 Product Release Notes](https://help.occupier.com/knowledge/monthly-release-notes?hsLang=en#2025-product-release-notes) - [2024 Product Release Notes](https://help.occupier.com/knowledge/monthly-release-notes?hsLang=en#2024-product-release-notes) - [2026 Product Release Notes](https://help.occupier.com/knowledge/monthly-release-notes?hsLang=en#2026-product-release-notes) [![](https://help.occupier.com/hs-fs/hubfs/Occupier%20Logo%20Blue%20Horizontal.png?width=200&height=39&name=Occupier%20Logo%20Blue%20Horizontal.png)](https://www.occupier.com) [mailto:email@email.com](mailto:email@email.com) Copyright © 2026, Occupier