ASC 842 Software for US Companies — Operating + Finance Lease Automation
ContractHive automates lease classification, ROU asset and lease liability calculations, modifications, disclosures and journal posting under ASC 842. Big 4 audit-ready, 370+ leases per portfolio, multi-currency.
Deployed by retail chains, REITs, telecom operators, healthcare networks and tech companies across 40+ countries. Reconciles ASC 842 (US GAAP) and IFRS 16 disclosures from a single engine for cross-border groups — eliminating dual-stack maintenance.
Built for the ASC 842 Lessee Lifecycle
From contract ingestion to year-end disclosure, the platform handles every stage of the ASC 842 lessee accounting cycle with audit-trail documentation at each step.
Lease Identification
ASC 842-10-15-3 identification of a lease — right to control the use of an identified asset for a period in exchange for consideration. Embedded leases in service contracts flagged.
Classification (5 Tests)
ASC 842-10-25-2 classification tests run at commencement and on reassessment triggers — transfer of ownership, purchase option, ≥75% term, ≥90% PV, specialised asset.
ROU Asset Calculation
Initial measurement = lease liability + payments at/before commencement + initial direct costs + restoration obligations − incentives received.
Lease Liability
Present value of unpaid fixed payments + variable payments dependent on index/rate + amounts under residual value guarantees + purchase / termination option payments.
Discount Rate Hierarchy
Rate implicit in the lease if readily determinable, otherwise incremental borrowing rate at commencement. Private-company risk-free rate election supported.
Modifications
Scope reductions, partial terminations, scope expansions and payment changes remeasured at the revised incremental borrowing rate per ASC 842-10-25-8 to 25-13.
Practical Expedients
Package of practical expedients, hindsight, short-term lease (12-month), low-value asset, separation of lease and non-lease components.
Impairment
ROU asset impairment tested under ASC 360-10. Triggering events monitored; impairment loss measured and recorded with full documentation.
Disclosures
ASC 842-20-50 lessee disclosures: total lease cost breakdown, maturity analysis, weighted-average term and discount rate, supplemental cash flow info, ROU asset/liability roll-forward.
ASC 842 + IFRS 16 from a Single Engine
US-headquartered companies with international subsidiaries report ASC 842 at parent level and IFRS 16 at IFRS-reporting subsidiary level. The two standards differ on operating-lease income-statement geography, discount-rate guidance, and several practical expedients — producing legitimate divergence between the two ledgers that must be reconciled at each close.
ContractHive runs both standards on the same lease portfolio in parallel and produces reconciliation schedules at the lease level. CFOs and controllers see exactly where ASC 842 and IFRS 16 diverge for each lease, and roll the differences up to consolidated-level disclosure tables.
IFRS 16 Implementation GuideASC 842 Software FAQ
Who must comply with ASC 842?+
All US-domiciled entities reporting under US GAAP must comply with ASC 842 — public companies adopted on 1 January 2019, private companies and not-for-profits on 1 January 2022. The standard covers lessees and lessors across all industries: real estate (retail, office, branch network), equipment leasing (fleet, IT, manufacturing), and short-term arrangements above the 12-month / low-value thresholds. Public BHCs, REITs, retail chains, telecom operators, healthcare networks and SaaS / tech companies all sit in scope.
How does ASC 842 differ from IFRS 16?+
Both standards put leases on the balance sheet, but ASC 842 retains the operating vs finance lease distinction with different income-statement geography, while IFRS 16 uses a single lessee model (treats all leases like finance leases). Operating leases under ASC 842 produce straight-line total lease expense; IFRS 16 always produces front-loaded interest + depreciation. Discount rate hierarchy and practical expedient lists also differ. FineIT supports both standards from one engine for US-incorporated entities with IFRS-reporting parents or subsidiaries.
Does the platform handle operating vs finance lease classification?+
Yes. The system runs the five ASC 842-10-25-2 classification tests (transfer of ownership, purchase option, lease term ≥ 75% of remaining economic life, present value ≥ 90% of fair value, specialised asset) at commencement and on each reassessment trigger. Outputs include classification rationale, supporting calculations, and audit-trail documentation.
Can ContractHive ingest lease contracts via AI / OCR?+
Yes. The AI ingestion pipeline reads PDFs, scanned documents and Word contracts in 20+ languages. It extracts lease term, payment schedule, fixed and variable components, options (renewal, termination, purchase), indemnity clauses and incentives. Extracted fields are confidence-scored and routed for human review before posting. Used for bulk onboarding of 370+ lease portfolios.
How are lease modifications handled?+
ASC 842-10-25-8 through 25-13 modifications (scope reduction, partial termination, scope expansion, payment changes) are remeasured automatically using the revised incremental borrowing rate at the modification date. The platform produces the modification accounting entries (gain/loss on partial termination, ROU asset and liability adjustment) and updates the disclosure tables.
Does it produce ASC 842 quantitative disclosures?+
Yes. The platform generates all ASC 842-20-50 lessee disclosures: total lease cost (operating, short-term, variable, finance), maturity analysis of undiscounted cash flows, weighted-average remaining lease term, weighted-average discount rate, supplemental cash flow info, and ROU asset/liability roll-forward. Each disclosure ties back to underlying lease-level data for audit support.
See ASC 842 on your lease portfolio
30-minute walkthrough with a lease-accounting specialist. Bring sample contracts — we’ll show classification + amortization end-to-end.