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ASC 842 Lease Schedule Template

A lease register, the reasoning behind each lease term, the liability and right-of-use asset schedules, and the footnote numbers ASC 842 asks for.

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What you get

Pack of 6 files: 2 documents, 4 spreadsheets

ASC 842 Lease Schedule Template
  • Lease PolicyDocument
  • Judgement NotesDocument
  • Lease RegisterSpreadsheet
  • Right-of-Use Asset RollforwardSpreadsheet
  • Liability AmortizationSpreadsheet
  • Disclosure SummarySpreadsheet
RiverASC 842 Lease Schedule Template

Lease Register

[Company]: every signed lease, extracted

Term Used is the concluded reasonably certain term from Judgement Notes, not the bare noncancelable period off the signature page. Nothing here is typed in from memory.

RefAssetClassificationTerm UsedDiscount RateLiability at Commencement
——————
——————
——————
——————

Term Used only fills in once the reasonably certain call is written down in Judgement Notes, against the four factor categories the standard asks for.

How to build an ASC 842 lease schedule

An ASC 842 lease schedule tracks the two balances a lessee reports for each lease under US GAAP. The lease liability is the present value of the payments still owed, and the right-of-use asset starts as that liability, adjusted for upfront costs and incentives. Each month the liability grows by interest and falls by the payment, while the asset amortizes as its classification requires. The totals drive the journal entries and the lease footnote.

Most mistakes start in the inputs, not the math. The lease term, the payments and the discount rate decide every number that follows, so write down where each one came from and why you chose it.

An empty, unfurnished office floor with white columns, ceiling lights and a gray tiled floor
The lease starts when the space is yours to use, not when rent starts. Photo: Andrea De Santis on Unsplash

Start from the signed lease

Take each lease's terms from the signed lease, every amendment and any side letter. A rent roll or broker summary shows the rent but rarely the options, escalation clause or incentives, and each one changes the numbers.

  • The noncancelable period, stated apart from any options
  • Base rent and how it rises: fixed steps, a percentage or an index such as CPI
  • Every renewal, termination and purchase option, with its price and notice period
  • Landlord incentives, such as an improvement allowance or free months
  • Costs you paid to get the lease signed, such as a broker's commission

Date the lease from the day you could use the space or equipment, not from the rent clause. The FASB defines commencement as the date a lessor makes the asset available for use1. The term also includes any rent-free months, such as a fit-out period.

Decide the lease term

The lease term is the noncancelable period, plus any renewal you are reasonably certain to exercise and any termination option you are reasonably certain not to use. Options the landlord controls count as well. The FASB calls reasonably certain a high threshold1.

No single fact settles it. As Deloitte's lease guide sets out, ASC 842 weighs contract-, asset-, market- and entity-based factors together2. Facts that can tip the balance include improvements you built that will still be valuable when the option arises, a renewal rent below market and the cost of moving.

PwC's guide adds a presumption: a renewal at rents equal to or above the initial term's is generally not reasonably certain3. A significant penalty for leaving can overcome it.

Leases of 12 months or less can stay off the balance sheet under the short-term election, which the FASB lets you make by class of underlying asset1. A lease with a purchase option you are reasonably certain to exercise doesn't qualify. Record each election in your accounting policy manual.

Classify the lease and set the rate

A lease that meets any one of five tests, set out in ASC 842-10-25-2, is a finance lease; one that meets none is an operating lease. PwC's guide explains each criterion3 and gives a rule of thumb for two.

The five finance lease tests

TestIt is a finance lease if
OwnershipOwnership transfers to you by the end of the term
Purchase optionYou are reasonably certain to exercise an option to buy the asset
Lease termThe term is a major part of the asset's remaining economic life (one approach: 75% or more)
PaymentsThe present value of the payments and any residual value you guarantee is substantially all of the asset's fair value (one approach: 90% or more)
Specialized assetThe asset is so specialized it is expected to have no other use to the lessor when the term ends

Use the rate implicit in the lease if you can determine it, though PwC notes that lessees rarely have the lessor's information3 to do so. Otherwise use your incremental borrowing rate: what you would pay to borrow an amount equal to the payments, fully secured, over a similar term.

A private company can instead elect a risk-free rate, by class of asset3. It spares you estimating a borrowing rate, but because that rate is lower, it gives a higher liability and asset.

Measure the liability and the asset

The liability includes fixed rent and the price of any purchase option you are reasonably certain to exercise. Rent tied to an index such as CPI goes in too, measured using the index at the commencement date1.

Don't forecast the index. Deloitte's guide states that ASC 842 does not allow an entity to forecast changes in an index or rate4. When CPI rises later, the extra rent is expensed as it is incurred. Rent that varies with sales or usage stays out of the liability entirely.

The right-of-use asset starts at the liability, plus rent paid by commencement and initial direct costs, minus incentives received. Initial direct costs are costs you would not have paid without the lease: Deloitte notes that commissions count, but legal and tax advice does not5. The revenue standard applies the same incremental-cost test to sales commissions.

ExampleOne office lease, from term to first monthAn illustrative example written for this guide, using the template's made-up sample figures.

Lease: office and lab space, $9,000 a month in year one, rising 3% a year, paid at month end. Five years noncancelable, plus a five-year renewal on the same terms. Discount rate: 6.5%.

Term: 120 months. Renewal rents run above the initial term's, but leaving would mean abandoning a lab fit-out that is still valuable, with no comparable space nearby. That penalty makes renewal reasonably certain.

Liability: $894,446.94. On the 60-month term alone it would be $486,550.84.

Right-of-use asset: $894,446.94, plus a $14,000 broker's commission, minus a $45,000 improvement allowance received, is $863,446.94.

Month one, as an operating lease: straight-line cost $10,059.16, interest $4,844.92. The liability falls by $4,155.08 and the asset amortizes by $5,214.24.

  • The term drives everything. Leaving out the renewal would understate the liability by $407,896.10, about 46%.
  • The asset is the balancing figure. Amortization is the straight-line cost minus the month's interest, so it grows as interest falls.

Run the lease schedule each month

The liability works the same way for both classifications: each month, add interest on the opening balance and subtract the payment. The asset is where they split. As PwC's guide explains, a finance lease shows straight-line amortization plus separate interest6, while an operating lease shows one straight-line cost.

Finance and operating leases after commencement

ItemFinance leaseOperating lease
ExpenseAmortization plus interest, higher in early yearsOne straight-line lease cost
Asset amortizationStraight-line over the shorter of the term and the asset's useful life, or its full useful life if you're reasonably certain to buy itThe straight-line cost minus the month's interest
Cash flow statementPrincipal in financing, interest in operatingAll payments in operating

Amortization periods and cash flow classification follow the FASB's lease standard1.

On an operating lease with rising rent, the asset's amortization won't track the liability's principal reduction. If the two match every month, the asset was copied from the liability.

At each close, tie both balances to the general ledger, as in any balance sheet reconciliation. The liability should reach zero with the last payment; if it doesn't, a payment or the opening balance is wrong.

Roll it into the footnote

The FASB requires a maturity analysis1 of undiscounted payments for each of the next five years, plus a total for later years. Show finance and operating leases separately, and reconcile each to its liability on the balance sheet.

You also disclose lease cost by type, cash paid, and the weighted-average remaining term and discount rate, split the same way. Weight the term by each lease's liability and the rate by its remaining payments.

Before you close the period

  • Every option has a written reasonably certain conclusion
  • Index-linked rent uses the commencement-date index, not a forecast
  • Each liability reaches zero at its last payment
  • Operating lease amortization differs from principal when rent rises
  • Both balances tie to the general ledger
  • The maturity analysis reconciles to the recognized liabilities

Review the judgment calls with a CPA

This guide explains the standard; it isn't accounting advice. Go over the lease term, classification and discount rate with your CPA or auditor, especially for a new kind of lease.

The template on this page also opens in River, which reads your signed leases, drafts the term judgment for each option and builds both schedules for you to check.

How to use this template

Use the files as they are, or open them in River. River asks for every signed lease, amendment and side letter, plus any improvement allowance or incentive letters. It pulls each lease's terms onto the Lease Register and writes the reasonably certain call on each option in Judgement Notes. Then it builds the schedules and the footnote figures from those conclusions.

  1. Download it or open it in River

    Download the two Word documents and four CSV sheets with no signup, or open the template in River to work on it with AI.

  2. Send your signed leases

    Share every lease, amendment, side letter and incentive letter. River pulls the terms onto the Lease Register and writes the option calls in Judgement Notes.

  3. Get the schedules and footnote

    River builds the liability and right-of-use asset schedules from the concluded terms, then rolls them into the Disclosure Summary.

  4. Review and roll it forward

    Check each conclusion with your accountant, ask River for changes, and roll the schedules and disclosure forward each period.

What's in the template

Four leases, one register, and the schedule each classification usesLease Register, Judgement Notes, Liability and ROU Activity, and Disclosure Summary.
ASC 842 Lease Schedule Template
RiverLease Register

Lease Register

Halloway Diagnostics, Inc., an illustrative robotics and diagnostics company. Term Used is the concluded reasonably certain term, not the bare noncancelable period.

RefAssetClassificationNoncancelableTerm UsedRateLiability at CommencementROU at Commencement
LS-01HQ Office & LabOperating60 mo120 mo6.50%894,446.94863,446.94
LS-02Distribution WarehouseOperating36 mo36 mo7.00%469,603.73472,803.73
LS-03Diagnostic Analyzer ArrayFinance48 mo48 mo6.80%90,514.5092,014.50
LS-04Lobby & Floor CopiersShort-term11 moExcluded by electionn/aNot recognizedNot recognized
TOTAL     1,454,565.171,428,265.17

Take LS-01's bare 60-month term at face value instead of the concluded 120 and the liability prices at 486,550.84, understating it by 407,896.10 on this one lease alone.

RiverJudgement Notes

Judgement Notes

The reasonably certain call, weighed against all four factor categories together, before any option reaches a schedule.

FactorLS-01 HQ Office: 5-year renewal option
Contract-basedThe 45,000.00 tenant improvement allowance amortizes into the renewal term; leaving before renewal forfeits the unamortized balance.
Asset-basedLab benching, fume hood ductwork and reinforced flooring were built to this space and have negligible value if abandoned.
Market-basedThe renewal rate is the same fixed escalator as the initial term, not reset to fair market value at exercise.
Entity-basedNo comparable lab-and-office space was identified within a reasonable relocation radius.
ConclusionReasonably certain. Term used: 120 months, not the 60-month noncancelable period alone.

LS-02's warehouse option reaches the opposite conclusion for the opposite reasons: no incentive to forfeit, no specialized improvements, and a month-to-month holdover at market rate on the other side.

RiverLiability & ROU

Liability & ROU Activity, year ended 2026-12-31

Each lease's own mechanics for the full calendar year, not one shared formula.

RefLiab. Jan 1InterestPrincipalLiab. Dec 31ROU Jan 1AmortizationROU Dec 31
LS-01784,920.9949,091.7865,485.42719,435.57731,741.1571,618.14660,123.01
LS-02323,858.9417,719.31156,280.69167,578.25325,992.26157,347.37168,644.89
LS-0378,858.254,713.2121,086.7957,771.4684,346.6313,144.9271,201.71
TOTAL1,187,638.1871,524.30242,852.90944,785.281,142,080.04242,110.43899,969.61

LS-01's principal reduction (65,485.42) and its ROU amortization (71,618.14) differ by 6,132.72 for the year: the flat lease cost runs above the escalating rent early in the term, so the asset amortizes faster than the liability falls. A template that mirrors the liability column into the ROU schedule cannot produce this row.

RiverDisclosure

Disclosure Summary, year ended 2026-12-31

What the auditor tests, rolled forward from the two schedules rather than aged from last period's note.

Line itemAmount
Operating lease cost295,776.60
Finance lease amortization13,144.92
Finance lease interest4,713.21
Short-term lease cost4,510.00
Total lease cost318,144.73
Weighted-average remaining term, operating5.87 yrs
Weighted-average remaining term, finance2.42 yrs
Weighted-average discount rate, operating6.58%
Weighted-average discount rate, finance6.80%
2027 maturity, undiscounted (operating + finance)317,814.48
Total recognized lease liability, 12/31/26944,785.28

The maturity analysis's present value row ties to this same 944,785.28, which shows the footnote describes the balance sheet it sits next to.

  • Lease PolicyYour elections in writing: classification tests, discount rate, short-term leases, index-linked rent, costs and incentives.
  • Judgement NotesThe reasonably certain call on each renewal, termination and purchase option, with the facts behind it.
  • Lease Register sheetOne row per lease: commencement, classification, term used, rate, rent and escalation, costs, incentives and initial balances.
  • Right-of-Use Asset Rollforward sheetEach month's opening asset, amortization and closing balance for every finance and operating lease.
  • Liability Amortization sheetOpening liability, interest, payment, principal and closing balance for each lease, month by month.
  • Disclosure Summary sheetLease cost by type, cash paid, weighted-average term and rate, and the maturity analysis tied to the liability.

Common questions

What is ASC 842?

ASC 842 is the US GAAP standard for lease accounting, issued by the FASB in February 2016. It requires lessees to record a right-of-use asset and a lease liability for most leases, including operating leases that used to stay off the balance sheet. Public companies adopted it for fiscal years beginning after December 15, 2018, and private companies three years later.

Do short-term leases go on the balance sheet?

Not if you make the short-term election for that class of asset. A lease qualifies when its term, including any renewal you are reasonably certain to take, is 12 months or less. It also can't have a purchase option you are reasonably certain to exercise. You expense the rent straight-line and report it as short-term lease cost in the footnote.

What discount rate should I use under ASC 842?

Use the rate implicit in the lease when you can determine it, which is uncommon for a lessee. Otherwise use your incremental borrowing rate, the rate on a fully secured loan of a similar amount and term. A private company may elect a risk-free rate for a class of assets instead, which gives a larger liability.

What is the difference between an operating lease and a finance lease?

Both put an asset and a liability on the balance sheet. A finance lease reports amortization and interest separately, so expense is higher early on, while an operating lease reports one straight-line cost. A lease is a finance lease if it meets any one of five tests, such as transferring ownership or covering a major part of the asset's remaining life.

Can I build an ASC 842 lease schedule in Excel?

Yes, for a handful of leases. Give each lease monthly rows for the payment, interest, principal and closing liability, plus separate columns for the asset's amortization and balance. Discount each payment on its own row so rent increases are captured. Lease software becomes worth it when you have too many leases to review one by one.

Is this ASC 842 lease schedule template free?

Yes. Download the two Word documents and four CSV sheets with no signup. They come filled in for a made-up company with two operating leases, a finance lease and a short-term lease. That shows how the sheets fit together before you enter your own. Edit with AI opens the same template in River.

What does Edit with AI do?

It opens the template in a free River workspace. River asks for your signed leases, amendments, side letters and incentive letters. It pulls each lease's terms onto the Lease Register and writes the reasonably certain call for every option in Judgement Notes. Only then does it build the two schedules and the Disclosure Summary for you to check.

Sources

  1. FASB. “Accounting Standards Update No. 2016-02, Leases (Topic 842).” storage.fasb.org (opens in a new tab)

  2. DART – Deloitte Accounting Research Tool. “5.2 Lease Term.” dart.deloitte.com (opens in a new tab)

  3. PwC Viewpoint. “3.3 Lease classification criteria.” viewpoint.pwc.com (opens in a new tab)

  4. DART – Deloitte Accounting Research Tool. “6.3 Variable Lease Payments That Depend on an Index or a Rate.” dart.deloitte.com (opens in a new tab)

  5. DART – Deloitte Accounting Research Tool. “6.11 Initial Direct Costs.” dart.deloitte.com (opens in a new tab)

  6. PwC Viewpoint. “4.4 Subsequent recognition and measurement – lessee.” viewpoint.pwc.com (opens in a new tab)

Written by

Chandler Supple

Co-founder & CEO, River

Chandler has spent the last six years working in AI, building tools for millions of users and Fortune 100 companies. In 2025, he co-founded River to build a new kind of operating system for AI agents.

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Reviewed by

Brian Joseff, Co-founder, River

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