Real ASC 842 Restatements From 2025–2026: Lessons

Two companies admitted to the SEC, in writing, that they had got ASC 842 wrong. Not a close judgement call on either side — an outright error, serious enough that both had to correct financial statements they had already published. One error was buried inside a corporate acquisition. The other was a lease that nobody had ever flagged as a lease at all.

Both cases come straight from real filings made in 2025 and 2026, not speculation or rumour. Read together, they map onto the two failure modes that quietly undo most lease accounting programmes: getting the measurement wrong at a moment of change, and simply losing track of a lease in the first place. Worth a look at both, because either one could just as easily be sitting somewhere in your own contract folder.

Failure mode one: treating an acquired lease as business as usual

In its Form 10-K for fiscal year 2025, filed with the SEC in 2026, Immersion Corporation disclosed that it had identified errors in how it applied ASC 842 — specifically, errors in the accounting for leases picked up through a business combination. Immersion had taken a controlling stake in, and began consolidating, Barnes & Noble Education (BNED) as a subsidiary. Somewhere in folding BNED's existing leases into the combined balance sheet, a rule that trips up plenty of finance teams got missed.

Under ASC 842, a lease assumed in a business combination isn't simply carried over at the seller's old numbers. The acquirer has to treat it as though a brand new lease had been signed on the acquisition date — remeasuring the right-of-use asset and lease liability using the discount rate, remaining term and payments as they stand at that date, not whatever was on the previous owner's books. Immersion's filing pointed to a related issue too: certain contracts had been misread on their end dates, which then affected whether leases were correctly classified as short-term. Skip the acquisition-date reset, or misjudge the term, and every downstream figure — the liability, the amortisation schedule, the interest expense — is wrong from day one.

The fallout went beyond a footnote correction. The investigation that surfaced the lease errors, alongside other issues at BNED, forced Immersion to delay its quarterly and annual filings. Nasdaq issued the company a delinquency notice in September 2025, giving it until 20 October 2025 to submit a compliance plan and until 9 February 2026 to fully catch up on its filings. A lease accounting error, in other words, didn't stay a lease accounting error. It became a listing problem.

Failure mode two: the lease that never made it into the population

The second case is simpler to describe, and just as easy to fall into. In its Form 1-K for fiscal year 2025, ACME AtronOmatic Inc disclosed that certain lease arrangements dating back to 2024 hadn't been accounted for under ASC 842 at all. Not measured incorrectly — not accounted for, full stop. The company treated the omission as an error in its previously issued financial statements and corrected it.

This is the completeness problem, and it's arguably the more common of the two. Once you have the right inputs, ASC 842 measurement is fairly mechanical — a discount rate, a term, a payment schedule, and the formulas take care of the rest. The harder part is knowing that every contract which counts as a lease has actually been identified in the first place. A lease hiding inside a services agreement, a vehicle contract signed by an operations team outside finance's usual view, a storage arrangement nobody thought to flag — any of these can sit outside the population being accounted for, through nobody's deliberate choice, until an auditor or a fresh set of eyes finds it.

Why these mistakes keep happening

Both failure modes trace back to the same root cause: leases don't all arrive through one door. Some sit in long-standing contracts on a shared drive nobody reviews regularly. Some are embedded inside supply or service agreements that don't look like leases on the surface — see our guide to identifying embedded leases for the kind of contract language that should raise a flag. And some arrive, as at Immersion, bundled inside an acquired company's entire contract portfolio, at exactly the moment finance teams are stretched thinnest integrating two sets of books.

M&A is a particular pressure point. Due diligence checklists tend to focus on a target's big-ticket items — debt, litigation, major customer contracts — and lease accounting can end up handled as a spreadsheet exercise done under time pressure, after the deal has already closed. By the time anyone circles back to confirm the acquisition-date remeasurement was actually done correctly, the error is already baked into several quarters of reported numbers.

Why auditors treat this as a big deal

Lease errors rarely stay small. Because the right-of-use asset and lease liability touch the balance sheet, the income statement (through amortisation and interest) and the disclosures all at once, a single wrong assumption — a bad discount rate, a missed lease, an unreset business-combination date — ripples through every period it wasn't caught in. That's exactly the pattern auditors are trained to treat as a warning sign: correcting one quarter rarely fixes it, because the same wrong input was sitting in every quarter since.

Repeated or significant lease errors are also a classic route to a material weakness finding in internal controls over financial reporting — a conclusion that a company's process for catching these mistakes isn't working, not just that one mistake slipped through. That finding, combined with the filing delays that often come with an investigation, is what turns an accounting question into the kind of market-moving disclosure reflected in Immersion's Nasdaq delinquency notice.

How to keep this from happening to you

Neither failure mode above is exotic. Both come down to process gaps that a reasonably disciplined finance function can close, well before an auditor or the SEC does it for you.

This is where a dedicated calculation tool earns its place. Ledgerage's calculator runs a single lease through ASC 842, IFRS 16 or GASB 87 and produces the right-of-use asset, the lease liability and the full amortisation schedule and journal entries, using the same step-by-step build we walk through here.

For finance teams managing a growing lease population — or building these checks into an AI-assisted close process — the metered API and MCP server apply that same consistent method automatically, on every lease, every time. That kind of repeatability is exactly what keeps one mismeasured lease from quietly turning into a restatement.

• Keep one lease inventory. Every contract that could conceivably be a lease — real estate, equipment, vehicles, embedded arrangements inside services or supply agreements — belongs in a single register that finance actually owns, not one scattered across departments and inboxes.
• Treat acquisitions as a trigger, not an afterthought. Any lease coming in through a business combination needs a fresh acquisition-date measurement as a standard step in deal close, not a clean-up task for later.
• Apply one consistent method every time. Discount rates, lease terms and classification judgements should follow the same logic across every lease, so a reviewer can see how a number was built, not just what it came out to.
• Keep the workings, not just the answer. An amortisation schedule and journal entries that show their working are far easier to defend under audit than a final figure with no trail behind it.

Key takeaways

Two real SEC filings from 2025 and 2026 show how ASC 842 restatements actually happen in practice:

• Immersion Corporation's fiscal 2025 Form 10-K disclosed ASC 842 errors tied to purchase accounting — leases assumed through a business combination were not remeasured as new leases at the acquisition date.
• ACME AtronOmatic Inc's Form 1-K disclosed that certain leases existing in 2024 had not been accounted for under ASC 842 at all — a completeness failure rather than a measurement one.
• Both companies corrected previously issued financial statements as a result; Immersion's related investigation also contributed to a Nasdaq delinquency notice over delayed filings.
• Business combinations and decentralised contract storage are two of the biggest sources of this kind of risk.
• A single lease inventory, one consistent measurement method and a visible audit trail are the practical defence against both failure modes.

Neither of these companies set out to misstate their lease accounting. The errors surfaced anyway — because a business combination changed the rules mid-stream in one case, and a contract simply slipped through the net in the other. If you're not entirely sure every lease in your business is in the population, correctly measured, and reset when it needs to be, that's worth checking before your auditor checks it for you. Ledgerage's free calculator gives you a clean ASC 842, IFRS 16 or GASB 87 answer on any single lease, acquired or otherwise, in a few minutes — no spreadsheet macros, no guesswork on the discount rate, just a number you can stand behind.

Frequently asked questions

Sources

• Immersion Corp — Form 10-K, fiscal year 2025 (SEC EDGAR)
• ACME AtronOmatic Inc — Form 1-K (Part II), fiscal year 2025 (SEC EDGAR)
• StockTitan — Immersion (NASDAQ: IMMR) restates results and consolidates Barnes & Noble Education
• StockTitan — Immersion Corporation announces receipt of a Nasdaq delinquency compliance notice