Sign the lease.
Aleq books the rest.
The right-of-use asset, the lease liability, and every period after — read off the signed agreement and kept current on your balance sheet.
From a signed lease to a booked entry.
Aleq reads the agreement, tests the classification against ASC 842, and books the entry. Below is how it ran on the lease at 535 Mission.
Worked example · 535 Mission · L-001operating · ROU $1.84M · posted
It stays current without a touch.
Each period the liability accretes interest at your discount rate, the payment pays it down, and the right-of-use asset amortizes alongside. Aleq rolls the schedule forward and books the entry — opening balance to closing — so the balance sheet is already right when you open it.
Change the lease — it remeasures itself.
Extend the term, reset the rent, exercise an option. Aleq remeasures the liability at today's discount rate, adjusts the right-of-use asset by the same amount, books the difference, and rebuilds the schedule from that date forward. Every period you already closed stays exactly as it was filed.
It drafts the judgment. You make it.
The schedule is mechanical. The judgments aren't — operating or finance, which discount rate, whether a renewal is reasonably certain. Aleq drafts each call with its reasoning against the codification and holds it for your sign-off. Nothing locks until you say so.
60-month term against an estimated 25-year economic life, no transfer of ownership, no bargain purchase option — none of the ASC 842-10-25 finance criteria are met. No rate is implicit in the lease, so the incremental borrowing rate applies.
The leases you actually carry.
Real estate or equipment, operating or finance — the same engine classifies and schedules whatever sits on your books.
Mostly real estate — and the leases hiding in your cloud bill.
Headquarters and regional offices are the obvious ones. But reserved data-center capacity and colocation racks can be embedded leases under ASC 842 — Aleq tests each commitment for the right to control an identified asset.
- HQ & satellite offices operating leases, escalators and free-rent periods handled.
- Colocation & reserved capacity tested for an embedded lease before it's expensed.
- Short coworking space short-term exemption applied, expensed straight-line.
Equipment and fleet — where finance leases actually show up.
Production equipment, tooling, and vehicle fleets often transfer substantially all of an asset's economic life. Aleq runs the ASC 842-10-25 classification on every schedule and lands finance versus operating with its reasoning attached.
- Production equipment finance lease — ROU amortized, interest accreted separately.
- Vehicle fleet operating, with a per-VIN schedule rolled up to the GL.
- Warehouse space operating, with renewal options weighed into the term.
Plant and heavy machinery — long terms, real interest.
Buildings, presses, and line equipment carry multi-year terms that frequently clear the 75%-of-life and 90%-of-fair-value tests. Aleq classifies each, accretes interest on the liability, and keeps the rollforward audit-ready.
- Plant & buildings finance leases where the term covers most of the useful life.
- Line equipment & presses PV tested against fair value at the discount rate.
- Forklifts & material handling operating, batched into one tidy schedule.
Imaging equipment and clinic space — plus the embedded ones.
MRI and imaging suites are usually finance leases; clinic and lab space is operating. Managed-equipment service contracts often bury a lease inside them — Aleq separates the lease component from the service before either is booked.
- Imaging & diagnostic equipment finance leases, depreciated and accreted apart.
- Clinic & lab space operating, with options and escalators modeled.
- Managed-equipment contracts lease component split from the service component.
Fulfillment footprint and the fleet that moves it.
Warehouse and sortation space scales with volume, and last-mile fleets turn over fast. Aleq keeps every site and vehicle on one schedule, remeasuring as you add or release capacity through the year.
- Fulfillment & sortation space operating, remeasured as the footprint changes.
- Last-mile vehicle fleet operating, per-vehicle schedules rolled up.
- Material-handling equipment classified per unit, finance where it qualifies.
For services firms, it's all office space.
For services firms the lease portfolio is offices and the equipment in them. Aleq carries each suite as an operating lease, applies the short-term exemption where you've elected it, and keeps the disclosure rollforward ready.
- Office suites operating, free-rent and escalators straight-lined.
- Parking & storage folded into the related office schedule.
- Copiers & office equipment short-term exemption applied where elected.
What controllers and auditors ask.
Operating or finance — who decides?
You do. Aleq runs the five ASC 842-10-25 criteria — ownership transfer, purchase option, term against economic life, present value against fair value, specialized use — and drafts the classification with its reasoning. It's a judgment call, so it stops there: you review the draft and sign off before anything locks.
What discount rate does it use?
The rate implicit in the lease where it's determinable; otherwise your incremental borrowing rate. Aleq proposes the rate and shows the basis — the rate drives the liability and every period after, so it never picks one unattended.
How are modifications and remeasurements handled?
When a lease changes — term extended, payments reset, an option exercised — Aleq remeasures the liability at the current discount rate, adjusts the right-of-use asset by the same amount, books the difference, and rebuilds the schedule from that date forward. Prior periods stay untouched.
Does it handle the short-term lease exemption?
Yes, by asset class, where you've elected it. For a lease of twelve months or less with no purchase option Aleq applies the exemption — no right-of-use asset or liability — and recognizes the cost straight-line over the term.
Is the rollforward audit-ready?
Every period exports as a tied-out rollforward — opening balance, interest, payments, amortization, closing balance — traced back to the signed lease and the rate you confirmed, with the journal entries and provenance attached — every figure traceable back to the agreement.
Put one lease on Aleq.
Bring a signed lease. Watch Aleq classify it, book the right-of-use asset and liability, amortize both to the period, and keep the rollforward and disclosures tied out — every entry drafted for your sign-off.