Lease accounting
Lease accounting refers to how businesses record and manage lease agreements in their financial statements. This includes tracking lease terms, payments and obligations and ensuring they comply with accounting standards such as IFRS 16.
The rules now require most leases to appear on the balance sheet, including both the asset being leased (called a right-of-use asset) and the related liability. This shift makes financial reporting more transparent and consistent.
Why it matters
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Keeps financial reports accurate and compliant
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Helps avoid missed payments or overcharges
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Identifies leases that could be renegotiated for better terms
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Supports decisions on whether to lease or buy assets
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Makes audits and reporting easier with clear records
What lease accounting includes
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Tracking lease terms and payments – Stay on top of start dates, renewals and service charges
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Classifying leases – Identify whether they're finance or operating leases under IFRS 16
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Calculating liabilities – Work out the value of lease assets and repayment schedules
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Allocating costs – Spread lease expenses over time correctly in accounts
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Reporting and compliance – Generate reports that meet audit and disclosure rules
The role of software
Modern lease accounting software, like Concerto's Estates Management module, automates the whole process. It:
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Flags renewal dates
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Calculates values for finance reports
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Tracks multi-site portfolios
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Connects with finance systems
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Links leases with building use and space data
The result? Less admin, better compliance and clearer insight into how your property and lease costs affect the bottom line.
