This EZLease guide explains how to separate lease and non-lease components under ASC 842 and IFRS 16, outlining pros, cons, and valuation methods. Electing not to separate reduces compliance burden but increases on-balance sheet values, possibly triggering finance lease classification or impairments. Real estate lease costs are categorized into lease components, non-lease components, and non-components like taxes and insurance. Valuation requires using standalone observable prices rather than contract amounts. The guide covers different lease structures, sample calculations, and key considerations for accurate allocation, audit readiness, and effective software use for compliance.

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