Lease Liability Calculator
ASC 842 requires lessees to recognise right-of-use (ROU) assets and lease liabilities for virtually all leases with terms greater than 12 months, eliminating the previous off-balance-sheet treatment for operating leases.
This calculator applies the present value methodology in ASC 842-20-30 to determine the initial lease liability and corresponding ROU asset for fixed-payment leases.
Amount per payment period
Use lessee's IBR if implicit rate not readily determinable (ASC 842-20-30-3)
Added to ROU asset at commencement date (ASC 842-20-30-5)
How it works
Enter your lease payment, frequency, term in months, and the incremental borrowing rate (or the rate implicit in the lease if readily determinable — ASC 842-20-30-3).
The calculator discounts all future fixed payments to present value using the effective interest method, computes the right-of-use asset (lease liability plus initial direct costs), and outputs a full amortisation schedule. Note that under ASC 842, both operating and finance leases require a lease liability on the balance sheet.