ASC 842 Lease Accounting
ASC 842 Compliance
for Lessees and Lessors
Full ASC 842 Implementation
We manage the complete ASC 842 implementation -- lease inventory, classification, ROU asset and liability calculation, transition adjustment, and disclosure preparation.
Ongoing Lease Accounting Support
Modifications, renewals, terminations, and remeasurement events require ongoing accounting attention. We provide the support your team needs to keep lease accounting current and audit-ready.
Technical Memos and Audit Support
We prepare the technical documentation for complex lease arrangements and coordinate with your external auditors to keep the lease accounting review efficient.
100+
Successful transactions completed
20+
Years of experience
$5 - 50m
Average size of transaction
$20-200m
Average market cap of clients across tech, manufacturing & services
ASC 842 Implementation and Ongoing Compliance Support
What makes us different?
ASC 842 changed the lease accounting landscape significantly — bringing operating leases onto the balance sheet and introducing a range of new judgments around lease identification, classification, and measurement. For many companies, the initial implementation is complete, but ongoing compliance requires continued attention as lease portfolios change, modifications occur, and new arrangements are entered into.
Corviniti provides ASC 842 accounting support at every stage — initial implementation, reassessment of existing policies, ongoing accounting for modifications and renewals, and audit preparation. We bring technical depth to the areas where judgment is most significant — incremental borrowing rates, embedded lease identification, modification accounting, and the treatment of variable lease payments.
We work with companies across a range of lease portfolio types — office and industrial real estate, equipment, vehicles, and technology — and understand how the standard applies differently in each context. Our documentation is structured to support your external auditors directly, reducing the time and effort the lease accounting review requires.
We help with:
- Lease Inventory and Population: Identify and catalog all leases across the organization, including real estate, equipment, and embedded leases in service contracts.
- Lease Classification Assessment: Determine operating vs. finance lease classification for each identified lease under the ASC 842 criteria.
- ROU Asset and Lease Liability Calculation: Calculate right-of-use assets and lease liabilities at commencement and on an ongoing basis, including the effect of modifications and remeasurement events.
- Incremental Borrowing Rate Analysis: Determine and document the incremental borrowing rate for leases where the implicit rate is not determinable.
- Practical Expedient Elections: Advise on available practical expedients and document the elections made, including the package of practical expedients available at transition.
- Transition Adjustment Calculation: Calculate the cumulative adjustment to retained earnings required at ASC 842 adoption and prepare the transition journal entries.
- Lease Modification and Remeasurement: Account for lease modifications, renewals, and other remeasurement events on an ongoing basis.
- Variable Lease Payments: Assess the accounting for variable lease payments — both those that depend on an index or rate (included in the liability) and those that do not (expensed as incurred).
- ASC 842 Disclosures: Prepare the maturity schedule, lease cost disclosure, weighted-average rate and term disclosures, and other required footnote disclosures.
- Lessor Accounting Under ASC 842: Advise on lessor accounting — classification of direct financing, sales-type, and operating leases, and the related income recognition and disclosure requirements.
Why Choose Us?
Big 4 expertise,
boutique agility
Corviniti provides ASC 842 compliance support with Big 4 technical depth and the responsiveness of a boutique. We deliver accurate, well-documented lease accounting that keeps your balance sheet right and your audit moving.
Startups and US Capital Markets are our focus
From companies implementing ASC 842 for the first time to established public companies managing ongoing lease portfolio changes, Corviniti provides the technical support that lease accounting requires.
- Startup and Fundraising Focused (including Venture Capital)
- Built for Capital Markets (including IPO and SPAC transactions)
- Boutique Attention
- Big Four Experience
- Transaction Deadline Oriented
Contact Us To
Learn More
Call: (347) 472-1115
Email: info@corviniti.com
Tell us about your lease portfolio and where you need support. We will respond within 24 hours.
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Frequently Asked Questions
ASC 842 became effective for public business entities for fiscal years beginning after December 15, 2018. For all other entities, it became effective for fiscal years beginning after December 15, 2021, with early adoption permitted. All calendar-year companies are now required to apply ASC 842.
A right-of-use (ROU) asset represents the lessee’s right to use an underlying asset for the lease term. It is measured at the present value of the remaining lease payments, adjusted for any initial direct costs, lease incentives received, and prepaid or accrued lease payments. For operating leases, the ROU asset is subsequently measured on a straight-line basis that ensures the total lease cost is recognized evenly over the lease term.
No. ASC 842 provides a practical expedient that allows lessees to exclude short-term leases — those with a term of twelve months or less at commencement, including renewal options the lessee is reasonably certain to exercise — from balance sheet recognition. If the expedient is elected (it must be elected by class of underlying asset), lease payments are recognized as expense on a straight-line basis over the lease term.
A lease modification is a change in the scope or price of a lease that was not part of the original terms. If a modification grants the lessee an additional right of use not included in the original lease at a price commensurate with the standalone price of that additional right, it is accounted for as a new separate lease. Otherwise, the modification is accounted for by remeasuring and reallocating the remaining consideration and reassessing the lease classification — either prospectively or as a termination and new lease, depending on the nature of the change.
Lease incentives — such as tenant improvement allowances — are reflected in the measurement of the right-of-use asset and lease liability. Under ASC 842, lease incentives receivable reduce the initial measurement of the ROU asset, and incentives already received reduce the ROU asset at commencement. This differs from the treatment under ASC 840, where tenant improvement allowances were treated as deferred rent liabilities.
Renewal options are included in the lease term only if the lessee is reasonably certain to exercise them. Reasonably certain is a high threshold — it requires significant economic incentive to renew, not just the possibility of renewal. Factors to consider include the contractual terms (below-market renewal rates), significant leasehold improvements, business importance of the location, and costs associated with relocating. We analyze the specific facts for each lease and document the conclusion.
Yes. We regularly work with foreign private issuers and companies with cross-border structures, including IFRS reporting, US GAAP reconciliations, and multi-entity consolidations for companies with domestic and international subsidiaries.
In most cases, we can begin within a few days of finalizing our agreement. Our onboarding process is straightforward — a brief discovery session, a clear statement of work, and secure access setup. We do not have lengthy intake procedures that delay the start of actual work.
