Lease accounting rules differ by country, but most frameworks align with standards issued by FASB or IFRS.

Organizations in the United States follow FASB guidance. Many other countries follow IFRS, which provides a globally recognized accounting framework.

Both standards define how to account for real estate and asset leases:

These standards require organizations to classify leases and calculate their financial impact in a compliant way.

Lease contracts can be classified as operating leases or finance leases, from both the lessee and lessor perspective. Based on this classification, organizations calculate and report: