What Is ASC 842?
ASC 842 is the lease accounting standard issued by the Financial Accounting Standards Board (FASB), requiring lessees to recognize most leases on the balance sheet. The standard applies to all public and private companies in the U.S., significantly changing how leases are recorded and disclosed.
The goal is to increase transparency and comparability by bringing operating leases into financial statements. This requires businesses to track lease details, calculate right-of-use (ROU) assets and lease liabilities, and manage compliance over the lease term.
Why ASC 842 Software Is Essential
Complying with ASC 842 manually using spreadsheets is risky and inefficient—especially for organizations with dozens or hundreds of leases. Purpose-built ASC 842 software automates:
- Lease classification (operating vs finance)
- ROU asset and lease liability calculations
- Amortization schedules
- Journal entries and disclosures
- Audit trails and internal controls
ASC 842 platforms also integrate with ERPs and help ensure accuracy during audits and financial reporting.
Top ASC 842 Software Platforms in 2025
| Software | Best For | Key Features | Pricing Model |
|---|---|---|---|
| LeaseQuery | Mid-size to enterprise | Centralized lease repository, audit support | Custom pricing |
| Visual Lease | Enterprises with complexity | Configurable controls, real-time dashboards | Quote-based |
| LeaseAccelerator | Global organizations | Compliance for ASC 842, IFRS 16, GASB 87 | Subscription-based |
| Trullion | Finance and accounting teams | AI-powered lease abstraction, seamless ERP sync | Custom |
| CoStar Real Estate Manager | Real estate-focused firms | Real estate and equipment lease tracking | Quote-based |
| NetLease (by Netgain) | Small to mid-sized businesses | NetSuite-native lease accounting solution | Subscription-based |
Key Features to Look For
1. Lease Abstraction & Centralization
Capture and store lease agreements in one system with full audit history and attachments.
2. Automated Calculations
Generate amortization schedules, ROU asset values, and journal entries based on ASC 842 logic.
3. Disclosure Reporting
Create FASB-compliant reports with footnotes, rollforwards, and weighted averages.
4. ERP Integration
Sync lease data with systems like NetSuite, SAP, Oracle, or Microsoft Dynamics.
5. AI and Machine Learning
Some platforms (e.g., Trullion) use AI to extract data from scanned leases automatically.
6. Audit Readiness
Maintain traceable workflows, user access controls, and version logs for easier audit support.
Real-World Use Cases
- Hospital Systems: A large healthcare provider with over 1,000 medical equipment and real estate leases uses Visual Lease to streamline compliance and reporting.
- Retail Chain: A U.S.-based retail company implements LeaseQuery to centralize lease management across hundreds of store locations, improving transparency and simplifying audit prep.
- SaaS Company: A fast-growing tech firm chooses Trullion for its AI-powered abstraction tools and direct integration with QuickBooks and NetSuite.
Pros and Cons
Pros
- Drastically reduces manual errors
- Accelerates month-end and year-end close
- Ensures consistency across lease classifications and entries
- Improves audit documentation and internal controls
Cons
- May require upfront implementation and training
- Customization for complex lease terms can add costs
- Integration with legacy ERP systems may be limited in some tools
Frequently Asked Questions
Q1: Is ASC 842 software mandatory?
No, but it is highly recommended for organizations managing more than a few leases. Manual compliance is time-consuming and error-prone.
Q2: Does ASC 842 software replace my ERP?
No. It complements your ERP by handling the lease-specific calculations and journal entries.
Q3: Can the software handle international standards like IFRS 16?
Yes, many tools (e.g., LeaseAccelerator, Visual Lease) also support IFRS 16 and GASB 87 for global reporting.
Q4: How long does implementation take?
Depending on the size and complexity of your lease portfolio, implementation can take anywhere from 4 weeks to 4+ months.
Final Insight
ASC 842 compliance is no longer optional for U.S.-based businesses, and handling lease accounting manually can put you at risk of audit issues and reporting delays. The right ASC 842 software provides automation, accuracy, and peace of mind.
Whether you’re managing 10 leases or 10,000, investing in a dedicated platform ensures that your financial statements stay compliant—and that your finance team stays efficient.