---
title: What is the Balance Sheet Impact of ASC 842?
description: "ROU Assets on the Balance Sheet: Lease Liabilities on the Balance Sheet: A lessee shall either present on the balance sheet or disclose in the notes all of the following: Accounting Guidance Referenc"
---
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# What is the Balance Sheet Impact of ASC 842?
**[ROU Assets](https://www.occupier.com/blog/asc-842-lease-accounting-glossary/) on the Balance Sheet:**
- Subject to the same considerations as other nonfinancial assets, such as property, plant, and equipment, in classifying them as current or noncurrent in a classified balance sheet.
- Should generally be classified as non-current for the entire lease term. A right-of-use asset recorded for a lease with an initial term of 12 months or less (i.e., the short-term lease measurement and recognition exemption was not taken) may be classified as current similar to other executory contracts.
- There are certain situations that could cause an individual right-of-use asset to have a negative balance. If this occurs, the negative balance should be presented as a liability separate and apart from the lease liability.
**[Lease Liabilities](https://www.occupier.com/blog/asc-842-lease-accounting-glossary/) on the Balance Sheet:**
- Lease liabilities are subject to all of the same considerations as debt instruments in classifying them as current or noncurrent in a classified balance sheet.
A lessee shall either present on the balance sheet or disclose in the notes all of the following:
1. Finance lease ROU assets and operating lease ROU assets separately from each other and from other assets
2. Finance lease liabilities and operating lease liabilities separately from each other and from other liabilities.
**Accounting Guidance Reference**
- ASC 842-20-45-1
- PwC *Leases October 2020* 9.2.1.1, 9.2.1.2
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