Lease modification
In one sentence
A lease modification is a change to the scope or consideration of a lease that was not part of the original terms, requiring the lessee to remeasure the lease liability.
A lease modification — such as extending the term, changing the space, or renegotiating rent — that is not accounted for as a separate contract requires the lessee to remeasure the lease liability using a revised discount rate at the effective date and adjust the right-of-use asset. Ledgerage Pro supports modelling remeasurements.
Cite: ASC 842-10-25-8 through 25-18
Lease liability
The lease liability is the present value of the remaining lease payments, discounted at the rate implicit in the lease or the lessee's incremental borrowing rate.
Read definition →Right-of-use (ROU) asset
A right-of-use asset is the lessee's right to use a leased asset over the lease term, recognised on the balance sheet at the lease liability plus prepaid payments and initial direct costs, less incentives.
Read definition →See Lease modification in a real calculation
Enter a lease and Ledgerage computes it — every figure traced back to the standard.