Skip to main content
Calcimator

Lease Accounting (ASC 842) Calculator

Calculate right-of-use asset and lease liability under ASC 842.

Inputs

$
years
%
$
$

Results

Right-of-Use Asset

$271,953.53

≈ 6 Teslas

Lease Liability$264,953.53
Total Lease Cost (Undiscounted)$300,000.00
Total Interest$35,046.47
Annual ROU Amortization$54,390.71
First Year Interest$13,247.68
Annual Lease Expense$60,000.00
How to Use This Calculator
  1. Enter the fixed monthly lease payment and the total lease term in years.
  2. Input your incremental borrowing rate as the discount rate.
  3. Enter initial direct costs and any prepaid rent at commencement.
  4. Review the Right-of-Use (ROU) asset and lease liability amounts for initial recognition.
  5. Use these figures as the basis for your ASC 842 journal entries at lease commencement.

How the result changes with Monthly Lease Payment

Monthly Lease PaymentRight-of-Use Asset
$100,000.00$5,306,070.63
$350,000.00$18,553,747.21
$650,000.00$34,450,959.11
$900,000.00$47,698,635.69

What each input means

Monthly Lease Payment
Fixed monthly lease payment amount.
Lease Term
Total lease term in years.
Discount Rate
Incremental borrowing rate or rate implicit in the lease.
Initial Direct Costs
Costs incurred to negotiate and arrange the lease.
Prepaid Rent
Any prepaid rent at lease commencement.

How this is calculated

Worked example, using the default values

  1. Identify Input Parameters
    4 parameters
    Monthly Lease Payment = 5000, Lease Term = 5, Discount Rate = 5, Initial Direct Costs = 2000 = 5 input(s) provided
  2. Calculate Right-of-Use Asset
    Right-of-Use Asset
    271953.53 = $271,953.53
  3. Calculate Lease Liability
    Lease Liability
    264953.53 = $264,953.53
  4. Calculate Total Lease Cost
    Total Lease Cost
    300000 = $300,000

Engine last updated . Checked against 3 independently-derived tests — how we verify calculators.

Related Calculators

The questions that sit next to this one — chosen by subject, including calculators filed under a different category.

Accounting

Straight-Line Depreciation Calculator

Calculate annual depreciation evenly over an asset's useful life.

Accounting

MACRS Depreciation Calculator

Calculate MACRS depreciation schedules for business assets.

Accounting

Accounts Receivable Aging Calculator

Analyze AR aging buckets and calculate days sales outstanding (DSO).

More in Tax & Accounting.