Long Term Lease Accounting Treatment

At its core, Long-Term Lease Accounting Treatment is a method of keeping the books for businesses that lease out property. It requires recording the cost of renting out a property and any related expenses, such as taxes or maintenance costs, in order to accurately and efficiently manage finances. As it relates to accounting treatment, long-term leases are typically classified as either finance or operating leases. Finance leases represent an ownership over an asset, while operating leases are considered short-term and are treated more like rental agreements. When done correctly, long-term lease accounting treatment can provide insights into how to better manage your business’s leases and keep profits up while helping you secure new leases in the future.