Lessee Accounting

Free CPA FAR (Financial Accounting & Reporting) lesson in Select Transactions. 22 min read, ~3,286 words.

Every lessee lease except short-term creates an ROU asset and a lease liability on the balance sheet. Finance lease results when any one OWNES criterion is met. Otherwise operating. Lease liability equals PV of future lease payments at the rate implicit (or the lessee's IBR). ROU asset equals lease liability...