Accounting for both the finance lease and operating lease are similar under ASC 842, unlike ASC 840. The new standard now requires both leases to recognize both the lease liability and the right of use asset on the balance sheet unless the lease is considered a short-term lease (12 months ...
ASC 842 specifies that the rate used should reflect a collateralized borrowing that covers the lease payments over the lease term. Accordingly, one common approach — often referred to as the notching approach — would be to develop an interest rate curve that takes into acc...