Lease accounting is a financial process used to record and disclose the rights and obligations associated with long-term leases. It can be complex and is generally regulated by various statutes, including those of the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB). Under these rules, lessees are required to recognize future lease payments as assets and liabilities on their balance sheets, enabling investors to understand the implications of actual or potential long-term rental agreements. Lease accounting is an important part of any business’ financial reporting – providing insight into the prospects, risks, and opportunities associated with leasing activity.