# Lease Accounting Basics

> Apply lease accounting basics (ASC 842 / IFRS 16 concepts) — recognizing lease assets and liabilities and understanding P&L impacts. Use when entering facility or equipment leases or implementing lease accounting processes.

- Skill: `itsual/lease-accounting-basics` (Agent Skill)
- Install (CLI): `npx skillmds@latest add itsual/lease-accounting-basics`
- Raw SKILL.md: https://api.skillmd.com/api/skills/itsual/lease-accounting-basics/raw
- Safety review: pending
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: Finance & Business
- Author: itsual (https://skillmd.com/u/itsual)
- Updated: 2026-09-21
- Page: https://skillmd.com/skills/itsual/lease-accounting-basics

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# Lease Accounting Basics

## Overview

Modern lease accounting brings most leases on balance sheet. Finance must capture contracts, measure liabilities, and explain expense patterns.

## When to Use

- New facility or equipment leases
- Lease accounting implementation
- Explaining EBITDA vs cash rent differences
- Audit support for lease portfolios

## Core Concepts

- Lease identification and term
- Discount rate and liability measurement
- Right-of-use asset
- Expense recognition patterns
- Short-term and low-value practical expedients (where allowed)

## Principles

- Incomplete lease inventories break the accounting
- Amendments and extensions need process, not ad-hoc treatment
- Non-finance stakeholders sign leases — capture is a control problem
- Bridge cash rent to accounting expense for leadership

## Verification

- [ ] Lease population is complete
- [ ] Measurement inputs are documented
- [ ] Reporting bridges cash and accounting views