Getting compliant was hard work. You classified your leases, built your reports, aligned with your auditors, and met the FASB ASC 842 deadline. That work counted.
But compliance is not something you maintain by standing still. New locations open. Leases get amended. Critical dates arrive without warning. If the accounting does not keep pace, the clean books you worked to build start drifting out of position without anyone noticing.
The risk today is not where organizations started. It is what slips through as the portfolio grows.
What the Standard Requires, Continuously
FASB ASC 842 does not end at adoption. Every new lease needs classification, every amendment triggers a reassessment, and every reporting cycle demands accurate documentation.
| Party | Classification Options |
| Lessee | Finance Lease / Operating Lease |
| Lessor | Direct Finance / Operating / Sales-Type |
Under IFRS 16 and GASB 87, those criteria shift further. Every time a lease changes, the analysis has to be revisited, not carried forward as-is.
What Slips Through as Portfolios Grow
The most common compliance gaps come from what happens after the initial adoption:
- A lease amendment is executed but the accounting scenario is never updated
- A new location opens and the lease is not assessed before the close cycle
- A critical date, an option window, a rent escalation, a termination right, passes with no one tracking it
These happen regularly in multi-location portfolios and rarely surface until an auditor starts asking. There is also a practical reality here. A restaurant group or a healthcare operator should not have to become experts in lease accounting to stay protected. Their focus belongs to their business. That is what we are here for.
This Is What Staying Ahead Looks Like
Take a dental group operating over 150 locations across multiple states. Each month we generate their full portfolio journal entry file, validate allocation coding, produce classified balance sheet reports, and post entries on client approval. As new locations open, we assess each lease, classify it under ASC 842, and bring it into the portfolio without disrupting the close cycle. When amendments come up, we update the scenario, apply the right accounting treatment, and flag it before it becomes a problem. Their team receives audit-ready disclosure reports and roll forward documentation every year without building it themselves. The business keeps growing. The books stay clean.
| Step | What We Do |
| Centralize | Consolidate all leases into a single, organized database |
| Assess | Evaluate each lease under ASC 842, IFRS 16, and GASB 87 |
| Report | Build the reports required for accurate financial filing |
| Audit-Ready | Ensure your portfolio is ready before an auditor arrives |
| Coordinate | Engage your auditors and credit providers ahead of every deadline |
This takes real experience, not just a good checklist. It takes people who understand the accounting, know how to manage the deadlines, and stay close enough to your portfolio to catch changes before they become findings. That is the difference between lease accounting that keeps up and lease accounting that catches up.
If your portfolio is growing and your lease accounting is not keeping pace, it is worth having that conversation before it shows up somewhere you did not expect.
Learn more about how we support lease accounting across your full portfolio: https://mohrpartners.com/lease-administration/
