Remember when the big scramble for ASC 842 and IFRS 16 first hit? Spreadsheets were flying, accountants were buried in contracts and “compliance” was the word of the year. Fast forward almost a decade and most companies have the basics down. But here’s the truth: lease accounting isn’t a one-and-done project.
The organizations that are thriving in 2025 are the ones that treat compliance as an ongoing discipline, not a box to check and forget. Here are 12 practical steps every finance leader should keep top of mind to stay ahead.
1. Keep learning
The rules haven’t stood still, and neither should you. Regularly refresh your team’s knowledge with updated training and CPE credits. “Same as last year” is a recipe for missed details.
2. Update your timelines
The processes you set up years ago probably need a refresh. Don’t wait until year-end chaos to revisit them. Get ahead now and spread the workload across the calendar.
3. Get everyone at the table
Leases touch every corner of the business: procurement, IT, logistics, real estate, tax, treasury and legal. Regular cross-functional check-ins keep data clean and prevent anything from slipping through the cracks.
4. Appoint a core team
While many groups are stakeholders, a small leadership team anchored by accounting should steer the ship. IT, project management and lease administration usually round out the roster.
5. Kick the spreadsheet habit
If your organization is still juggling thousands of leases in Excel, it’s time to move on. The complexity of ASC 842 and IFRS 16 requires a system that can handle terminations, escalations, impairments and variable rents without endless manual workarounds.
6. Hunt down hidden leases
Embedded leases love to hide in service agreements and vendor contracts. Do some detective work: check legacy systems, vendor portals, financials and even those old filing cabinets. It’s better if you find them before your auditor does.
7. Recheck compliance status
The assumptions you made back in 2019 might not hold water today. Pandemic-era concessions, M&A activity and changes in impairment accounting are all good reasons to take another look at how your leases are treated.
8. Invest in people
Lease accounting is highly specialized. And let’s be real, there’s a shortage of accountants out there. Make sure your team has the bandwidth and expertise to keep compliance steady. Bring in consultants or boost training if needed.
9. Tighten up policies
ASC 842 is principles-based, which means policies matter. Document your approach to materiality, borrowing rates and lease vs. non-lease components. Get auditor buy-in and keep records updated. This saves headaches later.
10. Streamline and centralize
Silos are expensive. A centralized process improves data accuracy, eliminates duplicate work and reduces wasted spend from missed renewal dates or sloppy end-of-term decisions.
11. Involve auditors early
Don’t wait until audit season to get feedback. Looping auditors in while you’re setting policies or implementing new software can save time and reduce stress down the road.
12. Build for the long haul
Initial compliance was “day one.” Now it’s all about “day two and beyond.” Put systems in place to scale with new leases, monitor ongoing performance and make compliance part of your everyday operations.
Why this matters
Yes, compliance is mandatory. But here’s the upside: when you take it seriously, you unlock real business value. Centralized lease data supports better decision-making, stronger vendor negotiations and smarter forecasting. Technology can automate the boring stuff, giving finance leaders the visibility they need to spot cost savings and avoid nasty surprises.
For example, companies that track critical dates accurately can avoid paying rent on expired agreements, negotiate from a position of strength and uncover opportunities to consolidate locations. In many cases, organizations that tighten compliance processes discover meaningful cost reductions that directly improve cash flow and margins. This is proof that strong compliance doesn’t just protect the balance sheet, it enhances it.
And remember, it’s not just about systems. It’s about people and policies too. Clear documentation, ongoing training and regular auditor engagement are just as critical as having the right software in place.
The bottom line for finance leaders
ASC 842 and IFRS 16 compliance changed the game. But the companies that will win in 2026 and beyond aren’t the ones who just met the original deadline. They’re the ones who built sustainable, forward-looking compliance practices that add value far beyond reporting.
Lease accounting is no longer a burden to manage. Done right, it’s a tool that strengthens financial discipline, improves efficiency and creates opportunities for strategic growth.
Dive even deeper with the CoStar Real Estate Manager Lease Accounting Outlook.