ASC 842 Lease Accounting
ASC 842 requires a lessee to put substantially every lease on the balance sheet: a right-of-use asset for what it may use, and a lease liability for what it still owes. These articles cover measuring those two amounts, classifying the lease, reporting the result, and keeping both correct as the lease changes.
87 articles across 7 groups.
Start here ASC 842 Implementation Guide: Steps, Examples, ChecklistScope, classification, measurement, journal entries and disclosure, worked end to end.
Understand the standard
What ASC 842 asks for, and which arrangements it applies to.
- Lease Accounting Explained: Key ConceptsLease accounting is a critical aspect of financial reporting that helps companies manage their leases effectively. It is a method of accounting for …
- What Constitutes a Lease? ASC 842 Definitions ExplainedThe Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) (collectively, “the Boards”) met earlier …
- Correct Lease Classification Steps for ASC 842The ASC 842, or Accounting Standards Codification Topic 842, is the accounting standard for lease accounting in the United States. It was issued by …
- Identifying Embedded Leases in ASC 842 ContractsWe previously discussed how FASB had discussed changes in ASC 842: Lease Accounting in Rate Implicit in the lease as well as the determination of IBR. …
- Understanding Executory Costs in the ASC 842 Lease StandardOne of the areas of the new lease standard that has not received that much attention is executory costs. However, as lessees consummate new leases …
- ASC 842 Six Years Later: Transparency Wins, Costs RiseSix years on, ASC 842 delivers real transparency—bond markets price lease risk, banks assess credit more accurately, and analyst forecasts improve. …
- FASB ASC 842 Roundtable: Key TakeawaysOn September 12, 2025, the FASB held a public roundtable to review the effectiveness of ASC 842. Stakeholders discussed benefits, costs, and …
- FASB ASC 842: Improving Lease Accounting StandardsThe FASB Accounting Standards Update (ASU) for topic ASC 842, Lease Accounting, became effective at the end of 2021 for all reporting periods after …
- ASC 842 Lease Accounting Guide 2024 | Complete OverviewThe definitive ASC 842 lease accounting guide for 2024. Master compliance requirements, learn classification methods, understand journal entries, and …
Measure the lease
The two numbers everything else depends on, and the rate that drives them.
- Lease Liability Under ASC 842: Formula and CalculationThis post explains the concept of lease liability under ASC 842, a critical component of modern lease accounting. Discover how to calculate lease …
- Right-of-Use Asset Explained: ASC 842 Calculation GuideUnder ASC 842, a Right-of-Use (ROU) Asset reflects the lessee's right to use a leased asset during the lease term. It is calculated by summing the …
- ASC 842 Examples and Amortization Schedules ExplainedA practical ASC 842 walkthrough with operating and finance lease examples (office space and equipment), sample journal entries, measurement inputs, …
- NPV vs XNPV for Lease Payments: Which to UseBefore we get into Net Present Value (NPV) and Extended Net Present Value (XNPV) in lease accounting and lease analysis, let's break down the concept …
- Incremental Borrowing Rate: Step-by-Step CalculationThe Incremental Borrowing Rate (IBR) is crucial for ASC 842 compliance, determining the present value of lease liabilities and right-of-use assets. …
- Building an IBR From Your Own Borrowing DataA step-by-step guide for private companies to determine and update the IBR under ASC 842, including asset class strategies and pros and cons of IBR …
- Lessee Guide: Implicit Rate vs. IBR in ASC 842 ComplianceIn a previous post, we discussed how FASB is finalizing a change in ASC 842: Lease Accounting. As it stands, the change is set to impact every …
- ASC 842 Risk-Free Rate Election for Private CompaniesPrivate companies may elect a risk-free rate instead of determining an incremental borrowing rate under ASC 842. It removes the hardest judgement in …
- Choosing the Ideal Incremental Borrowing Rate Under ASC 842The problem of determining the rate implicit in a lease also presented a concern that most preparers used the incremental borrowing rate (IBR) as the …
- Mastering IBR Under ASC 842 to Reduce Tax ExposureThe introduction of the ASC 842 lease accounting standard has undeniably ushered in a new era of transparency and rigor in how companies account for …
- Rent Expense: 365 vs. 360-Day Basis in ASC 842 AccountingThe ASC 842 Lease Accounting Standard, implemented by the Financial Accounting Standards Board (FASB), brought about significant changes to how …
- Leap Days and Month Variability in ASC 842 ExplainedThe ASC 842 lease accounting standard, which governs the accounting for leases, emphasizes the importance of accurately recognizing lease expenses and …
- Explained: ASC 842 Lease Accounting Example ScenarioThe ASC 842 Lease Accounting Standard was introduced by the Financial Accounting Standards Board (FASB) to establish new guidelines for lease …
- Cost Analysis vs. Lease Accounting (ASC 842) + ExampleUnderstand what cost analysis and lease accounting each do, how they reinforce one another, and the risks of separating them. Includes a 5-year …
Report the impact
Where leases surface in the statements, the ratios and the tax provision.
- ASC 842 Reporting: Balance Sheet, P&L and Cash FlowASC 842 changes how leases appear in key accounting reports, from the balance sheet to the cash flow statement. Learn how these changes impact your …
- ASC 842 and Your Ratios: Debt-to-Equity, Current, ROAExplore the impact of ASC 842 on essential financial ratios like debt-to-equity, current ratio, and ROA, which stakeholders use to assess financial …
- How ASC 842 Affects Company KPIs and Performance MetricsThe ASC 842 lease accounting standard has transformed how leases impact the financial statements and performance indicators of companies. Explore the …
- Strategic Adjustments in Quarterly Ratios with ASC 842Quarterly Ratio Impact Analysis (QRIA) offers insights into how ASC 842 affects financial ratios like debt-to-equity and ROA, allowing organizations …
- Lessee Disclosures Under ASC 842: What to ReportThere has been much focus on the specific calculations required to comply with the proposed leasing standards. However, with the final standard …
- ASC 842 Deferred Tax: Treatment and Worked ExamplesASC 842 has transformed lease accounting by requiring both operating and finance leases to be recorded on the balance sheet, impacting taxable income, …
- Mitigating Tax Implications in ASC 842 Lease AccountingASC 842 is the lease accounting standard issued by the Financial Accounting Standards Board (FASB) that requires lessees to recognize assets and …
- Tax Implications of ASC 842 Lease AccountingThe introduction of ASC 842 brought about significant changes to how companies account for leases in their financial statements. While the primary …
- Navigating Tax Implications of ASC 842: A Guide for CFOsThe ASC 842 lease accounting standard, which mandates significant changes in how companies recognize and report their lease obligations, has …
- 8 Tax Strategies for Private Companies Under ASC 842Implementing the ASC 842 lease accounting standard can be complex, and it's essential for private companies to understand its implications and …
- Lease Re-evaluation and Tax Liabilities Under ASC 842In the intricate financial landscape navigated by Chief Financial Officers (CFOs), every decision has a ripple effect on a company's bottom line. One …
- CFO’s Training Guide: Mitigating Tax Risks with ASC 842The ASC 842 lease accounting standard, introduced by the Financial Accounting Standards Board (FASB), brought forth a paradigm shift in the way …
Handle changes
What to do when the lease is modified, subleased, impaired or sold.
- When Are Lease Modifications Required Under ASC 842?Lease modifications can have a significant impact on lease terms, lease payments, and lease liability. With the implementation of the ASC 842 …
- Right-of-Use Asset Impairment Under ASC 842 ExplainedThe recent changes in ASC 842 along with the Coronavirus pandemic have come together to unleash a plethora of chances in how leased assets are treated …
- ASC 842 Sale-Leaseback: Journal Entries and RisksUnder ASC 842, sale-leasebacks move owned property off the books and bring right-of-use assets and lease liabilities onto the balance sheet. This …
- Sublease Strategy Under ASC 842: A CFO's GuideIn the multifaceted realm of lease accounting, subleases represent a unique area of focus, especially with the enforcement of the ASC 842 standard. …
- Accounting for Future CPI Increases with ASC 842When the future CPI rates are not known, ASC 842 requires lessees to estimate the future CPI rates to account for the CPI increase in rent. The …
- Lease Modifications and Tax Exposure: A CFO's GuideIn the dynamic environment of modern business, lease agreements aren't always static. They can be frequently modified to reflect changing business …
- Accounting for Acquisitions Simplified Under ASC 842Accounting for an acquisition under the ASC 842 Lease Accounting Standard involves several steps, including identifying and evaluating the leases …
- COVID-19 and Lease Accounting Under ASC 842As the world continues to grapple with an invisible enemy, our daily lives aren’t all that have been impacted. Companies as a whole have been unable …
Get it right
The mistakes that draw audit findings, and the controls and close routines that prevent them.
- 6 Common ASC 842 Pitfalls and How to Avoid ThemASC 842 compliance presents challenges such as lease misclassification, poor data management, and incorrect discount rates. This guide covers the top …
- Avoid These 10 ASC 842 Lease Accounting MistakesHere are some common mistakes lessees make when dealing with lease accounting according to the ASC 842 standards and how iLeasePro can easily help you …
- What Happens If You Do Not Comply with ASC 842Non-compliance with the ASC 842 lease accounting standard can have several negative impacts on a company, including the following: Financial statement …
- 10 Internal Controls Every Lease Accounting Team NeedsImplementing new processes and internal controls is crucial for ensuring accurate and timely lease accounting under the new standards. Here are some …
- ASC 842 Audit Checklist: Evidence, Controls & AutomationLearn what auditors look for under ASC 842, common compliance pitfalls, and how automation can simplify audit readiness and strengthen your lease …
- How to Navigate an ASC 842 Lease Accounting AuditIn the world of finance and accounting, keeping up with regulatory requirements can often be a daunting task. One of the more recent standards to be …
- ASC 842 Lease Accounting Audit: Compliance Made SimpleWhen an auditor evaluates a company's implementation of ASC 842 lease accounting, they generally follow a series of steps to ensure compliance when …
- Lease Accounting Process Flow: End to End Under ASC 842This comprehensive visual shows exactly how ROU assets, lease liabilities, interest expense, and amortization flow through each stage from transaction …
- 10 Year-End Lease Accounting Challenges and FixesAs year-end approaches, lease accounting teams face mounting pressure to prepare accurate financial statements under ASC 842. This blog explores the …
- Efficient Year-End Close Strategies for Lease AccountingCreating an efficient and accurate year-end close process for lease accounting is essential for businesses to ensure compliance with financial …
- A Year-End Communication Plan for ASC 842 ComplianceAs the fiscal year draws to a close, a structured year-end communication plan becomes essential to address lease accounting challenges under ASC 842. …
- CPA's Avoiding ASC 842 Audit FailuresAudits under ASC 842 can be challenging, but with the right strategies, you can avoid errors and ensure compliance. Discover how centralized lease …
Transition and implementation
Adopting the standard, and moving an existing portfolio onto it.
- How to Implement the New Lease Accounting StandardLeases (Topic 842) was issued by the Financial Accounting Standards Board (“FASB”) in February 2016 and represented a rather substantial change in how …
- Transition Options Under the Lease Accounting StandardThe Financial Accounting Standards Board (FASB) has recently taken a significant step in easing the transition to the new lease accounting standard by …
- FASB ASC 842 Transition Guide for Private CompaniesThe experiences of public companies in transitioning to the ASC 842 lease accounting standard have underscored the complexities and potential pitfalls …
- Steps for Transitioning Equipment Leases to ASC 842If you're a business owner or a professional responsible for managing commercial equipment leases, you understand the complexities and challenges that …
- Key Challenges in Implementing the Lease Accounting StandardA survey on the impact of the new lease accounting standard (as it pertains to lessees) was recently completed and its results validated some of the …
- CPA Guide: Transitioning Clients to ASC 842Lease accounting has indeed undergone significant changes with the implementation of ASC 842 Lease Accounting Standard, and it is essential for …
Technology and the profession
Systems, automation and how the work itself is changing.
- ERP API Integration for Lease Accounting: Why It MattersAPI integration between lease accounting software and ERP systems ensures data accuracy, compliance, and operational efficiency for organizations with …
- Automation: The Key to ASC 842 Lease ComplianceAccurate recognition of lease payments, especially accruals, is crucial for ASC 842 compliance. Automated payment scheduling eliminates manual …
- How AI Is Changing Lease Accounting WorkflowsAI will likely have a significant impact on lease accounting in several ways, as it has the potential to enhance efficiency, accuracy, and compliance. …
- Why Spreadsheets Pose Risks for ASC 842 Lease AccountingWhile spreadsheets are widely used for various tasks in accounting, they may not be the ideal tool for complying with the ASC 842 lease accounting …
- Efficient Lease Management with Cloud Computing SolutionsThe Game Changer in Lease Data Management Today, let’s chat about something that's revolutionizing the way we handle lease data: Cloud computing. It’s …
- AI Revolutionizes Lease Accounting Beyond FictionAI: Your New Lease Accounting Sidekick Alright, let's switch gears and chat about something straight out of a sci-fi movie – Artificial Intelligence …
- Transforming Lease Accounting with Data AnalyticsThe Crystal Ball of the Digital Age Today, we're spilling the beans on data analytics and its game-changing role in lease accounting. Imagine having a …
- AI in Lease Accounting: Navigating Implementation ChallengesWhile AI offers numerous benefits for lease accounting, there are also potential risks and challenges that organizations should consider when …
- Using AI in Year-End Lease Accounting AuditsAs we approach the close of another fiscal year, businesses are gearing up for the annual audit—a critical period of financial reflection and …
- Five Ways to Simplify Workflows Using Lease AccountingA lease accounting solution can help minimize workflow in several ways: Automated data entry: A lease accounting solution can automate data entry by …
- Practical Applications of Blockchain in Lease AccountingBlockchain: The Lease Accounting Superhero Let's dive into something that’s buzzing in the finance tech world - blockchain. And before you think it, …
- Access Lease Accounting on the Go with Mobile IntegrationLease Accounting Isn't Chained to the Desk Anymore Welcome to the era where the office isn't a place, it's a concept. And in this world, being able to …
- Technology Requirements for the New Lease StandardsEarlier this week, I participated on a webinar on the new lease accounting standards. The webinar was given by one of the major accounting firms and …
- Which Businesses Benefit Most from Lease SoftwareA company with more than ten active leases must consider a lease accounting solution. The new accounting standard requires more sophisticated …
- Who Might Not Benefit from Lease Accounting Software?While lease accounting software can be highly beneficial for many businesses, there are some types of businesses that might not be good candidates for …
- How CPA Firms Grow Revenue with ASC 842 ServicesCPA firms can increase their Monthly Recurring Revenue (MRR) by providing ASC 842 Lease Accounting solutions for private company clients. By offering …
- CPA Firm Clients: ASC 842 Software Implementation FrameworkUnderstand ASC 842: The first step, which is the most challenging, is understanding the requirements of ASC 842. It is a radical departure from past …
- CPAs: Adapting to the Lease Accounting ChangesHave you started thinking about how the Lease Accounting changes will impact your clients? We hope so!! We've written this free whitepaper for you, a …
- Exploring the Trends Shaping the Future of Lease AccountingThe world of lease accounting and management is ever-evolving, with innovative approaches surfacing to match the shifting economic landscape. …
- Lease Accounting: Trends Today and What’s AheadThe landscape of financial accounting for leases has undergone significant changes with the implementation of ASC 842, a standard issued by the …
- Lease Accounting's Digital Shift: What ChangedToday We Are Talking Tech in Lease Accounting! Welcome to the world where tech meets lease accounting! It's a lot cooler than it sounds, trust me. You …
- Creating a Culture of Continuous Improvement in AccountingIn the ever-evolving world of finance and accounting, the pursuit of excellence and efficiency is a constant endeavor. Building a culture of …
- 15 Accounting Roles in ASC 842/IFRS 16 Lease AccountingDiscover how lease accounting compliance and insights depend on every finance role. This guide shows contributions, impacts, risks, collaboration, and …
- ASC 842 Impact on Hospitality Industry Lease AccountingThe ASC 842 Impact to the Hospitality Industry whitepaper dives into the details and offers an example of what one might consider a typical situation …
- iLeasePro ASC 842 Compliance and Cost SavingsiLeasePro expands its ASC 842 capabilities, helping organizations streamline lease management from abstraction to disclosure—cutting audit time and …
- iLeasePro Earns AICPA SOC 1 Type 1 AttestationiLease Management LLC and iLeasePro have attained SOC 1 Type 2 certification, validating operational controls and strengthening client trust. This …
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