Gartner Research

Significant Judgment Areas in Lease Accounting

Published: 11 March 2019

ID: G00707069

Analyst(s): Finance Research Team


The new lease accounting standards (ASC 842/IFRS 16) require corporate controllers and chief accounting leaders to apply more judgment as they adopt and comply with the new rules. Learn where accounting leaders and teams are applying significant judgment and the factors influencing their decisions.

Table Of Contents


Areas of Significant Judgment

Determining Short-Term Leases and Extension Options

Conditions to Qualify for the Short-term Lease Exemption

Challenge 1: Continually-Extended Short-Term Leases May Not Qualify

Challenge 2: Defining Reasonable Certainty

Accounting Leaders’ Experiences With Variable-Term Leases

Setting Materiality Thresholds and Defining Leases of Low-Value Assets

Challenge 3: Putting a Dollar Value on Materiality

Approaches to Determining Materiality

Approach to Low-Value Leases


Recommended by the Authors

About This Research


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