This ASC 842/IFRS 16 finance lease example features a 3-year copier lease at $230 per month, including $32 for maintenance, with a 4% borrowing rate and a $7,000 fair value. The present value of lease payments, excluding maintenance, is $6,728.77, exceeding 90% of the asset’s value, qualifying it as a finance lease. Initial entries record the right-of-use asset, split between current and long-term liabilities. Monthly accounting includes rent payments, interest accrual, amortization, and liability reclassification. Year-end disclosures show $4,752 in future payments with a $4,560 present value. EZLease setup ensures accurate classification and compliance.

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