{"id":36380,"date":"2026-04-30T07:25:54","date_gmt":"2026-04-30T11:25:54","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=36380"},"modified":"2026-04-30T07:25:56","modified_gmt":"2026-04-30T11:25:56","slug":"lease-accounting-explained","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/lease-accounting-explained\/","title":{"rendered":"Lease accounting: What it is and why it matters"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--standard entry-header--has-illustration entry-header--has-illustration--standard\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tLease accounting: What it is and why it matters\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\tLease accounting ensures your business properly records lease obligations under current standards. From understanding what lease accounting is to applying it correctly, the way you account for lease transactions directly affects your balance sheet and key financial ratios. A clear, practical grasp of the essentials helps you account for lease agreements accurately and with confidence.\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-04-30T07:25:54-04:00\">April 30, 2026<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Lease accounting: What it is and why it matters\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-us\/blog\/lease-accounting-explained\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n\t<\/header>\n\n\n\n<div class=\"wp-block-post-author has-dark-background-color alignfull\">\n\t<div class=\"container\">\n\t\t<div class=\"col\">\n\t\t\t\t\t\t\t<div class=\"co-authors\">\n\t\t\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-us\/blog\/author\/joechurchwoods\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2025\/05\/Joe-Yard-2-crop-350x350.jpg\" class=\"entry-author__image\" alt=\"Joe Church Woods\" \/>\t\t\t\t<span class=\"entry-author__name\">Joe Church Woods<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n<p>If your business leases equipment, vehicles, office space, or other assets, those agreements must be properly reflected in your financial statements.<\/p>\n\n\n\n<p>For many organizations, lease accounting represents a significant compliance challenge that affects how assets and liabilities appear on the balance sheet.<\/p>\n\n\n\n<p>Recent changes to accounting standards have transformed how companies report leases, moving most lease obligations from footnotes onto the balance sheet itself.<\/p>\n\n\n\n<p>This shift affects leverage ratios, lending covenants, and how investors view your organization&#8217;s financial health.<\/p>\n\n\n\n<p id=\"h-here-s-what-we-ll-cover\"><strong>Here\u2019s what we\u2019ll cover:<\/strong><\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-is-lease-accounting-in-finance\" data-level=\"2\">What is lease accounting in finance?<\/a><\/li><li><a href=\"#h-why-lease-accounting-matters-for-businesses\" data-level=\"2\">Why lease accounting matters for businesses<\/a><\/li><li><a href=\"#h-operating-versus-finance-leases\" data-level=\"2\">Operating versus finance leases<\/a><\/li><li><a href=\"#h-how-to-record-lease-transactions-in-four-steps\" data-level=\"2\">How to record lease transactions in four steps<\/a><\/li><li><a href=\"#h-lease-accounting-examples\" data-level=\"2\">Lease accounting examples<\/a><\/li><li><a href=\"#h-lease-accounting-standards-and-updates\" data-level=\"2\">Lease accounting standards and updates<\/a><\/li><li><a href=\"#h-how-lease-accounting-impacts-financial-statements\" data-level=\"2\">How lease accounting impacts financial statements<\/a><\/li><li><a href=\"#h-common-challenges-and-best-practices-in-accounting-for-leases\" data-level=\"2\">Common challenges and best practices in accounting for leases<\/a><\/li><li><a href=\"#h-frequently-asked-questions-about-lease-accounting\" data-level=\"2\">Frequently asked questions about lease accounting<\/a><\/li><li><a href=\"#h-final-thoughts\" data-level=\"2\">Final thoughts<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-lease-accounting-in-finance\">What is lease accounting in finance?<\/h2>\n\n\n\n<p>Lease accounting is the process of recording, measuring, and reporting lease transactions in your financial statements.<\/p>\n\n\n\n<p>When your business leases an asset rather than purchasing it, you create specific accounting obligations that must be reflected in your books.<\/p>\n\n\n\n<p>Under current accounting standards, most leases create two primary items on your balance sheet:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Right-of-use (ROU) asset: <\/strong>your right to use the leased asset during the lease term<\/li>\n\n\n\n<li><strong>Lease liability:<\/strong> your obligation to make future lease payments<\/li>\n<\/ul>\n\n\n\n<p>Anyone responsible for financial reporting needs to understand lease accounting, including finance teams at companies with significant leases, public companies subject to Securities and Exchange Commission reporting, private companies following Generally Accepted Accounting Principles or International Financial Reporting Standards, and auditors reviewing financial statements.<\/p>\n\n\n\n<p>While the concept seems straightforward, complexity arises when calculating present values, determining discount rates, tracking multiple leases, and applying the correct classifications.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-lease-accounting-matters-for-businesses\">Why lease accounting matters for businesses<\/h2>\n\n\n\n<p>Lease accounting matters because leases create long-term financial obligations that directly affect leverage ratios, profitability, and borrowing capacity.<\/p>\n\n\n\n<p>Proper recognition ensures financial statements accurately reflect a company\u2019s true commitments and risk profile.<\/p>\n\n\n\n<p>Because leases extend beyond a single reporting period, they create ongoing economic rights and payment obligations.<\/p>\n\n\n\n<p>Recognizing those commitments upfront rather than expensing payments as they occur provides a clearer view of total liabilities and future cash requirements.<\/p>\n\n\n\n<p>Proper accounting for lease transactions provides several important benefits:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Accurate financial reporting: <\/strong>shows the true extent of your obligations and assets.<\/li>\n\n\n\n<li><strong>Regulatory compliance:<\/strong> meets requirements under ASC 842 or IFRS 16.<\/li>\n\n\n\n<li><strong>Better decision-making:<\/strong> gives management visibility into long-term commitments when planning investments.<\/li>\n\n\n\n<li><strong>Investor confidence:<\/strong> demonstrates transparency and strong financial controls.<\/li>\n\n\n\n<li><strong>Reduced audit risk:<\/strong> lowers the likelihood of restatements or compliance issues.<\/li>\n<\/ul>\n\n\n\n<p>Under current standards, most leases now appear directly on the balance sheet rather than only in footnotes.<\/p>\n\n\n\n<p>As a result, lease commitments have a more immediate and visible impact on how outside stakeholders evaluate financial strength and stability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-operating-versus-finance-leases\">Operating versus finance leases<\/h2>\n\n\n\n<p>Accounting standards classify leases based on the substance of the arrangement. This classification determines how you record the lease in your financial statements.<\/p>\n\n\n\n<p>Here&#8217;s how these two types compare:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Feature<\/strong><\/td><td><strong>Operating lease<\/strong><\/td><td><strong>Finance lease<\/strong><\/td><\/tr><tr><td><strong>Economic substance<\/strong><\/td><td>Rental arrangement<\/td><td>Purchase with financing<\/td><\/tr><tr><td><strong>Asset ownership<\/strong><\/td><td>Remains with lessor<\/td><td>Transfers to lessee (typically)<\/td><\/tr><tr><td><strong>Lease term<\/strong><\/td><td>Shorter, less than asset life<\/td><td>Major portion of asset life<\/td><\/tr><tr><td><strong>Income statement<\/strong><\/td><td>Straight-line lease expense<\/td><td>Interest + amortization expense<\/td><\/tr><tr><td><strong>Cash flow statement<\/strong><\/td><td>Operating activities<\/td><td>Financing + operating activities<\/td><\/tr><tr><td><strong>Balance sheet impact<\/strong><\/td><td>ROU asset and liability<\/td><td>ROU asset and liability<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The timing of expense recognition differs in these two cases.<\/p>\n\n\n\n<p>Operating leases produce an even expense over time, while finance leases front-load the expense because interest is higher in earlier periods.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-operating-lease-essentials\">Operating lease essentials<\/h3>\n\n\n\n<p>Operating leases function like traditional rental arrangements. You use the asset for a defined period, make periodic payments, and return it at the end of the term.<\/p>\n\n\n\n<p>Even though the arrangement functions like a rental, current standards still require recognition of an ROU asset and lease liability.<\/p>\n\n\n\n<p>The income statement reflects a single lease expense, typically recognized on a straight-line basis.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-finance-lease-requirements\">Finance lease requirements<\/h3>\n\n\n\n<p>Finance leases transfer substantially all risks and rewards of ownership. A lease is typically classified as a finance lease if one or more of the following apply:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Ownership transfers to you by the end of the lease.<\/li>\n\n\n\n<li>The lease includes a bargain purchase option.<\/li>\n\n\n\n<li>The lease term covers the majority of the asset&#8217;s economic life (often 75% or more).<\/li>\n\n\n\n<li>The present value of lease payments equals or exceeds substantially all of the asset&#8217;s fair value (typically 90% or more).<\/li>\n\n\n\n<li>The asset is so specialized that only you can use it without major modifications.<\/li>\n<\/ul>\n\n\n\n<p>Finance lease accounting requires you to record both interest expense on the liability and amortization expense on the ROU asset.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-record-lease-transactions-in-four-steps\">How to record lease transactions in four steps<\/h2>\n\n\n\n<p>Recording leases correctly involves several calculations and journal entries. These can be handled manually or entrusted to <a href=\"https:\/\/www.sage.com\/en-us\/sage-business-cloud\/intacct\/product-capabilities\/extended-capabilities\/lease-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\">lease accounting software<\/a> that can automate much of the work.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-1-identify-lease-details\">Step 1: Identify lease details<\/h3>\n\n\n\n<p>Begin by gathering all relevant information from your lease agreement.<\/p>\n\n\n\n<p>This should include the lease commencement date, total lease term (including reasonably certain renewal periods), fixed payment amounts and timing, variable payments based on indexes or rates, and any residual value guarantees or purchase options.<\/p>\n\n\n\n<p>You\u2019ll also need to determine your incremental borrowing rate, which becomes your discount rate if the lease doesn&#8217;t specify an implicit interest rate you can readily determine.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-2-calculate-the-right-of-use-asset\">Step 2: Calculate the right-of-use asset<\/h3>\n\n\n\n<p>Calculate the present value of all lease payments using your discount rate. This gives you the initial measurement of your lease liability.<\/p>\n\n\n\n<p>The ROU asset equals this lease liability amount plus any initial direct costs you incurred and any lease payments made at or before commencement, minus any lease incentives received.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-3-record-initial-entries\">Step 3: Record initial entries<\/h3>\n\n\n\n<p>At lease commencement, record this journal entry:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit: <\/strong>right-of-use asset (calculated amount)<\/li>\n\n\n\n<li><strong>Credit:<\/strong> lease liability (present value of lease payments)<\/li>\n<\/ul>\n\n\n\n<p>This entry establishes both the economic right and the payment obligation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-step-4-create-an-amortization-schedule\">Step 4: Create an amortization schedule<\/h3>\n\n\n\n<p>Prepare a schedule allocating each payment between interest and principal.<\/p>\n\n\n\n<p>For operating leases, track the straight-line expense amount and adjust ROU asset amortization accordingly.<\/p>\n\n\n\n<p>For finance leases, amortize the ROU asset separately, typically straight-line over the shorter of the lease term or the asset&#8217;s useful life.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-lease-accounting-examples\">Lease accounting examples<\/h2>\n\n\n\n<p>Concrete examples can help clarify how these concepts apply in practice.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-operating-lease-accounting-example\">Operating lease accounting example<\/h3>\n\n\n\n<p>Imagine your company leases office space for five years with annual payments of $50,000, paid at the beginning of each year. Your incremental borrowing rate is 5%.<\/p>\n\n\n\n<p>The present value of lease payments would be $229,079. This becomes both your initial lease liability and ROU asset (assuming no initial direct costs or incentives). Here\u2019s your initial journal entry:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit:<\/strong> right-of-use asset $229,079<\/li>\n\n\n\n<li><strong>Credit:<\/strong> lease liability $229,079<\/li>\n<\/ul>\n\n\n\n<p>Each period, you&#8217;ll record a straight-line lease expense of $50,000, adjusting the ROU asset to reflect the difference between total expense and calculated interest.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-finance-lease-accounting-example\">Finance lease accounting example<\/h3>\n\n\n\n<p>Consider a five-year equipment lease with $20,000 annual payments at year-end and a 6% discount rate. Ownership transfers to you at lease end.<\/p>\n\n\n\n<p>The present value of these payments is $84,286. The initial entry would look like this:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit:<\/strong> right-of-use asset $84,286<\/li>\n\n\n\n<li><strong>Credit: <\/strong>Lease liability $84,286<\/li>\n<\/ul>\n\n\n\n<p>In year one, the interest expense equals $5,057 (6% \u00d7 $84,286). When you make the $20,000 payment, $5,057 goes to interest, and $14,943 reduces principal.<\/p>\n\n\n\n<p>You&#8217;ll also record amortization expenses, typically straight-line over five years ($16,857 annually). So your year-one entries would look like this:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit:<\/strong> interest expense $5,057<\/li>\n\n\n\n<li><strong>Debit:<\/strong> lease liability $14,943<\/li>\n\n\n\n<li><strong>Credit:<\/strong> cash $20,000<\/li>\n<\/ul>\n\n\n\n<p>Plus an entry for the amortization of the ROU asset:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Debit:<\/strong> amortization expense $16,857<\/li>\n\n\n\n<li><strong>Credit:<\/strong> accumulated amortization $16,857<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-lease-accounting-standards-and-updates\">Lease accounting standards and updates<\/h2>\n\n\n\n<p>Recent changes to lease accounting rules represent significant updates to accounting standards.<\/p>\n\n\n\n<p>Both major standards share the same goal: increasing transparency by bringing lease obligations onto the balance sheet.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-asc-842\">ASC 842<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.fasb.org\/page\/ShowPdf?path=ASU%202023-01%E2%80%94Leases%20(Topic%20842)%E2%80%94Common%20Control%20Arrangements.pdf&amp;title=ACCOUNTING%20STANDARDS%20UPDATE%202023-01%E2%80%94Leases%20(Topic%20842):%20Common%20Control%20Arrangements\" target=\"_blank\" rel=\"noreferrer noopener\">ASC 842<\/a> is the U.S. GAAP standard that replaced ASC 840, issued by the Financial Accounting Standards Board to improve financial reporting transparency. These changes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Require lessees to recognize ROU assets and lease liabilities for virtually all leases longer than 12 months.<\/li>\n\n\n\n<li>Maintain the dual model of operating and finance leases.<\/li>\n\n\n\n<li>Provide a practical expedient allowing companies to exclude short-term leases from balance sheet recognition.<\/li>\n\n\n\n<li>Require extensive disclosures about lease terms and payment obligations.<\/li>\n<\/ul>\n\n\n\n<p>Public companies adopted ASC 842 in 2019, while private companies had extended deadlines.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-ifrs-16\">IFRS 16<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.ifrs.org\/issued-standards\/list-of-standards\/ifrs-16-leases\/\" target=\"_blank\" rel=\"noreferrer noopener\">IFRS 16<\/a> is the standard issued by the International Accounting Standards Board.<\/p>\n\n\n\n<p>While it shares ASC 842&#8217;s goal of balance sheet transparency, it takes a different approach. This standard:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eliminates the operating vs. finance lease distinction for lessees.<\/li>\n\n\n\n<li>Requires nearly all leases to be accounted for similarly to finance leases.<\/li>\n\n\n\n<li>Uses a single model where lessees recognize depreciation and interest.<\/li>\n\n\n\n<li>Provides exemptions for short-term leases and low-value assets.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-lease-accounting-impacts-financial-statements\">How lease accounting impacts financial statements<\/h2>\n\n\n\n<p>Lease accounting affects all three primary financial statements:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Balance sheet effects<\/strong> include increased assets due to ROU assets, increased liabilities due to lease obligations, and changes to debt-to-equity and leverage ratios as previously off-balance-sheet obligations become visible.<\/li>\n\n\n\n<li><strong>Income statement effects<\/strong> vary by lease type. Operating leases show single-line lease expenses, while finance leases show separate interest and amortization expenses.<\/li>\n\n\n\n<li><strong>Cash flow statement effects<\/strong> differ between lease types. Operating lease payments remain in operating activities, while finance lease principal payments move to financing activities. This reclassification can improve operating cash flow for finance leases.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-common-challenges-and-best-practices-in-accounting-for-leases\">Common challenges and best practices in accounting for leases<\/h2>\n\n\n\n<p>Organizations implementing lease accounting standards face several recurring challenges. Being aware of common issues is the first step toward effectively addressing them.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-managing-multiple-leases\">Managing multiple leases<\/h3>\n\n\n\n<p>Large portfolios require tracking numerous ROU assets and liabilities.<\/p>\n\n\n\n<p>Best practices to handle this workload include centralizing lease contract management to catch modifications and renewals, implementing dedicated lease accounting software that automatically tracks all leases and generates required journal entries, and establishing clear processes for identifying embedded leases in service contracts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-determining-discount-rates\">Determining discount rates<\/h3>\n\n\n\n<p>Incremental borrowing rates must be supportable and documented.<\/p>\n\n\n\n<p>Many organizations collaborate with treasury teams to establish consistent methodologies for determining these rates, including a plan for reassessment when modifications occur.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-avoiding-compliance-pitfalls\">Avoiding compliance pitfalls<\/h3>\n\n\n\n<p>Frequent issues include missed embedded leases, incorrect rates, and overlooked modifications.<\/p>\n\n\n\n<p>Clearly documented policies, periodic reviews, regular training, and maintaining clear audit trails can reduce errors.<\/p>\n\n\n\n<div class=\"single-cta gated-content\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Small business survival toolkit<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get your free guide, business plan template, and cash flow forecast template to help you run your business and achieve your goals.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-aee5a8c2-281d-42bb-8da2-eda5b62f63c6\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Download your free toolkit<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<div class=\"single-cta__downloads\">\n\t\t\t\t\t\n\t\t\t\t\t10,548 readers have downloaded this toolkit\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg\" class=\"single-cta__image\" alt=\"Female hands working on a laptop\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1327127856-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-frequently-asked-questions-about-lease-accounting\">Frequently asked questions about lease accounting<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1777547164389\"><strong class=\"schema-faq-question\">What is the 90% rule in leasing?<\/strong> <p class=\"schema-faq-answer\">The 90% rule says that if the present value of lease payments equals or exceeds 90% of the asset\u2019s fair value, the lease typically qualifies as a finance lease. This threshold helps determine whether the arrangement effectively transfers ownership risks and rewards.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1777547210840\"><strong class=\"schema-faq-question\">How do you record leases in accounting?<\/strong> <p class=\"schema-faq-answer\">To record a lease, calculate the present value of lease payments, record the ROU asset and lease liability at commencement, then allocate each payment between interest and principal using an amortization schedule. Each period, record the lease expense or interest expense and amortization expense based on this schedule.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1777547257349\"><strong class=\"schema-faq-question\">What is ASC 842 lease accounting?<\/strong> <p class=\"schema-faq-answer\">ASC 842 is the U.S. GAAP standard requiring most leases longer than 12 months to be recognized on the balance sheet as ROU assets and lease liabilities while maintaining operating and finance classifications.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1777547294912\"><strong class=\"schema-faq-question\">What does a lease accountant do?<\/strong> <p class=\"schema-faq-answer\">A lease accountant evaluates contracts, calculates liabilities and ROU assets, maintains amortization schedules, tracks modifications, prepares disclosures, and ensures compliance with applicable standards.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1777547326355\"><strong class=\"schema-faq-question\">How long is a typical lease term for accounting purposes?<\/strong> <p class=\"schema-faq-answer\">Lease terms can vary, but lease accounting should include the non-cancellable period plus renewal periods that are reasonably certain. Real estate leases often span five to 20 years, equipment leases three to seven years, and vehicle leases two to five years.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1777547367640\"><strong class=\"schema-faq-question\">Can you modify a lease after it starts?<\/strong> <p class=\"schema-faq-answer\">Yes. When a modification occurs, you must reassess the lease liability using modified payment terms and an updated discount rate. The accounting treatment depends on whether the modification grants additional rights or changes existing terms.<\/p> <\/div> <\/div>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1777547403175\"><strong class=\"schema-faq-question\">What happens to lease accounting when a lease ends?<\/strong> <p class=\"schema-faq-answer\">At lease expiration, you remove both the ROU asset and lease liability from your balance sheet. If these balances don&#8217;t equal zero, you recognize a small gain or loss. If you return the asset to the lessor, no further entries are needed. If you exercise a purchase option, you reclassify the ROU asset to owned equipment and continue depreciating it.<\/p> <\/div> <\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-final-thoughts\">Final thoughts<\/h2>\n\n\n\n<p>Lease accounting requires attention to technical details, but getting it right provides real benefits, including compliance with current standards, a clear understanding of your obligations, better strategic planning, and credibility with auditors and investors.<\/p>\n\n\n\n<p>Strong systems and processes make lease accounting manageable even for organizations with complex portfolios.<\/p>\n\n\n\n<p>Dedicated <a href=\"https:\/\/www.sage.com\/en-us\/accounting-software\/lease-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\">lease accounting software<\/a> like Sage Intacct can help by automating calculations, tracking modifications, generating disclosures, and maintaining audit trails, transforming this compliance requirement into a manageable routine task.<\/p>\n\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-ab515c6e-7e90-4c2f-a67e-113872516e8b\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg\" class=\"single-cta__image\" alt=\"Working from home with tea in hand\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2022\/04\/GettyImages-1073797282-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n\n<section class=\"more-topics alignfull has-grey-light-background-color wp-block-sage-post-topics\">\n\t<div class=\"container\">\n\t\t<div class=\"row\">\n\t\t\t<div class=\"col col-12 col-lg-4\">\n\t\t\t\t<h3 class=\"more-topics__title h2\">Browse more topics from this article<\/h3>\n\t\t\t<\/div>\n\t\t\t<div class=\"col col-12 col-lg-8\">\n\t\t\t\t<ul class=\"post-tags__list\">\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/accounting-101\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tAccounting 101\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/boss-your-business\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tBoss your business\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/business-continuity\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tBusiness Continuity\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/cash-flow\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tCash Flow\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/growing-a-business\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tGrowing a business\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/productivity\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tProductivity\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/small-business\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tSmall business\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t\t\t<li class=\"post-tags__item\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-us\/blog\/hub\/starting-a-business\/\" class=\"post-tags__link button button--secondary\">\n\t\t\t\t\t\t\t\tStarting a business\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t\t<\/ul>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n<\/section>\n\n<div class=\"alignfull wp-block-sage-related-posts\">\n\t<section class=\"related-posts card-grid has-dark-background-color\">\n\t<div class=\"container\">\n\t\t\t\t\t<div class=\"row\">\n\t\t\t\t<div class=\"col\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--featured h1\">Explore more wisdom<\/h2>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\n\t\t\t<div class=\"row related-posts__featured\">\n\t\t\t\t<div class=\"col card-grid__item\">\n\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-0 post-29306 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations tag-accounting-101 tag-boss-your-business tag-business-continuity tag-small-business business_type-small-business card-post--is-clickable\"\n>\n\t<div class=\"card-post__media-wrapper\">\n\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"1215\" height=\"810\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1415809513-1215x810.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1415809513-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1415809513-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1415809513-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\t<\/div>\n\n\t<div class=\"card-post__content\">\n\t\t\t\t\t<div class=\"card-post__label\">Recommended<\/div>\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-12T10:24:32-04:00\">June 12, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">9 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h3\">\n\t\t\t\t\t\t\t<a\n\t\t\t\t\tclass=\"card-post__title-link\"\n\t\t\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-a-purchase-order\/\"\n\t\t\t\t>\n\t\t\t\n\t\t\tWhat is a purchase order (PO) and how is it used?\n\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t<\/p>\n\n\t\t\n\t\t\t\t\t<p class=\"card-post__description\">\n\t\t\t\tIf your business buys from suppliers, purchase orders are one of the most important controls you have. Learn what a purchase order includes, how it works, and when to use each type.\t\t\t<\/p>\n\t\t\n\t\t\t<\/div>\n\n\t<\/article>\n\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\n\t\t\t\t\t<div class=\"row related-posts__non-featured\">\n\t\t\t\t<div class=\"col col-12\">\n\t\t\t\t\t<h2 class=\"related-posts__heading related-posts__heading--more h4\">More on this Topic<\/h2>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-1 post-29310 post type-post status-publish format-standard has-post-thumbnail hentry category-strategy-legal-operations category-technology-innovation tag-artificial-intelligence tag-automation tag-boss-your-business tag-cash-flow tag-cloud-financial-management tag-sage-accounting business_type-small-business business_type-growing-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/order-to-cash-process-otc-o2c\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1190223207-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1190223207-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1190223207-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1190223207-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-10T12:23:35-04:00\">June 10, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">12 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is the Order to Cash process?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-2 post-29062 post type-post status-publish format-standard has-post-thumbnail hentry category-strategy-legal-operations tag-boss-your-business tag-business-intelligence tag-growing-a-business tag-inventory-management tag-productivity tag-staying-competitive tag-supply-chain-management business_type-small-business business_type-growing-business\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-an-order-management-system-oms\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1417607997-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1417607997-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1417607997-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1417607997-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-10T10:25:03-04:00\">June 10, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">19 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tWhat is an order management system?\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-3 post-28210 post type-post status-publish format-standard has-post-thumbnail hentry category-growth-customers category-strategy-legal-operations tag-boss-your-business tag-business-intelligence tag-business-strategy tag-distribution tag-growing-a-business tag-inventory-management tag-productivity tag-supply-chain-management business_type-small-business business_type-growing-business industry-distribution industry-wholesale-distribution\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/what-is-order-processing\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-841574854-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-841574854-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-841574854-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-841574854-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-02T11:22:21-04:00\">June 2, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">19 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tOrder processing explained: Steps, systems and best practices\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t<div class=\"col col-6 col-lg-3 card-grid__item\">\n\t\t\t\t\t\t<article\n\t\tclass=\"card-post related-post related-post-4 post-28775 post type-post status-publish format-standard has-post-thumbnail hentry category-money-matters category-strategy-legal-operations tag-business-strategy tag-cash-flow tag-growing-a-business tag-small-business business_type-small-business business_type-growing-business industry-nonprofit\"\n>\n\t\t\t<a\n\t\t\tclass=\"card-post__link\"\n\t\t\thref=\"https:\/\/www.sage.com\/en-us\/blog\/peer-to-peer-fundraising-best-practices\/\"\n\t\t\t\t\t>\n\t\t\t<figure class=\"card-post__media\">\n\t\t\t\t\t\t\t<img decoding=\"async\" width=\"684\" height=\"384\" src=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1414263386-684x384.jpg\" class=\"card-post__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1414263386-684x384.jpg 684w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1414263386-768x512.jpg 768w, https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1414263386-1215x810.jpg 1215w\" sizes=\"auto, (min-width: 48em) 250px, (min-width: 30em) 100vw, 100vw\" \/>\t\t\t\n\t\t\t\n\t\t\t\t\t<\/figure>\n\n\t\t\n\t\t\t\t\t<div class=\"card-post__meta\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-06-02T05:54:37-04:00\">June 2, 2026<\/time><\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"card-post__meta-text\"><span class=\"reading-time\">15 min read<\/span><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\n\t\t<p class=\"card-post__title h5\">\n\t\t\tPeer-to-peer fundraising guide: Best practices for success\t\t<\/p>\n\n\t\t\t<\/a>\n\t\n\t\n\t\t\n\t\n\t<\/article>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n<\/section>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Lease accounting ensures your business properly records lease obligations under current standards. From understanding what lease accounting is to applying it correctly, the way you account for lease transactions directly affects your balance sheet and key financial ratios. A clear, practical grasp of the essentials helps you account for lease agreements accurately and with confidence.<\/p>\n","protected":false},"author":1847,"featured_media":20294,"menu_order":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"sage_hide_published_date":false,"sage_hide_read_time":false,"sage_hide_share_buttons":false,"footnotes":""},"categories":[43],"tags":[110,195,399,299,153,272,34,152],"business_type":[40,41],"lilypad":[],"context":[],"industry":[452,55],"persona":[98,97],"imagine_tag":[209,468,233,230,231],"coauthors":[592],"class_list":["post-36380","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-accounting-101","tag-boss-your-business","tag-business-continuity","tag-cash-flow","tag-growing-a-business","tag-productivity","tag-small-business","tag-starting-a-business","business_type-small-business","business_type-growing-business","industry-hospitality","industry-professional-services"],"sage_meta":{"region":"en-us","author_name":"Joe Church Woods","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2023\/09\/GettyImages-1437931473.jpg","imagine_tags":{"209":"Accounting","468":"Grow your business","233":"Medium Businesses","230":"Small business","231":"Start up business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/36380","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/1847"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=36380"}],"version-history":[{"count":5,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/36380\/revisions"}],"predecessor-version":[{"id":36387,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/36380\/revisions\/36387"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/20294"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=36380"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=36380"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=36380"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=36380"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=36380"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=36380"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=36380"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=36380"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=36380"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=36380"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}