Lease accounting is the process of recognizing, measuring, and reporting lease transactions on a company’s financial statements. It primarily involves tracking the money that a business pays to use an asset from another entity, such as land and equipment. On the balance sheet, companies must record the leased asset’s value, the rent payments they make, and any accrued expenses associated with the lease. These disclosures provide stakeholders with greater clarity into a company’s financial position and the obligations it has in relation to leasing assets. The rules for lease accounting are continually changing – be sure to keep up with the latest developments so you can accurately account for your company’s leased assets.