Lease Accounting Guide

Enhance the Clarity and Accuracy of Your Financial Statements

Accounting Standards Codification Topic 842, Leases, requires lessees to recognize most leases on their balance sheet through a right-of-use asset and corresponding lease liability. This could impact your ratios and certain covenants.

This guide will help you:

• Identify leases
• Distinguish operating leases from finance leases
• Present leases on your balance sheet, income statement, and statement of cash flows
• Account for nonlease components, purchase options, variable lease payments, and initial direct costs
• Navigate lease modifications, subleases, sale-leaseback transactions, lease incentives, and related-party leases