From a lease to a full workpaper, in four steps
Here is exactly what happens between typing a lease into Ledgerage and getting an audit-grade schedule — the present value, right-of-use asset and lease liability, the amortization schedule, the journal entries and the disclosures, every number traced back to the standard that produced it.
Four steps, one deterministic result.
Every computation — free web calculator, API call, or MCP tool call — runs through the same four steps before you see a schedule.
Enter the lease
Describe the lease exactly as it is written: the reporting standard (ASC 842, IFRS 16 or GASB 87), the commencement date and term, the recurring payment, whether it is paid in advance or arrears, and the discount rate — the rate implicit in the lease if you know it, otherwise your incremental borrowing rate. Optional inputs capture the real-world detail that changes the numbers: annual rent escalations, initial direct costs, lease incentives, prepaid rent, a residual value guarantee, and the classification-test inputs (economic life, fair value, purchase options) the engine needs to tell an operating lease from a finance lease. Nothing is required beyond the basics — you can compute a lease in five fields and refine from there.
The engine computes PV, ROU asset & liability
The moment the inputs are valid, the engine measures the lease liability as the present value of the payments not yet paid, discounted at the periodic rate (the annual rate divided by the number of payments per year), with payments in advance discounted one period less than payments in arrears. The right-of-use asset is that liability plus prepaid rent and initial direct costs, less any lease incentives received. In parallel the classifier evaluates all five ASC 842 finance-lease criteria — ownership transfer, purchase option, major part of economic life, substantially all of fair value, and specialized-asset — and returns the classification with the reasoning and citation for each criterion. Under IFRS 16 and GASB 87 there is a single lessee model, so every lease is measured like a finance lease.
Review the schedule, journals & disclosures
From the initial measurement the engine builds the full period-by-period amortization schedule: payment, interest accretion, principal reduction, closing lease liability, right-of-use amortization, closing ROU asset and total lease expense for every period — reconciled to exactly zero at the end of the term. It generates the balanced commencement and periodic journal entries, ready to post, and the ASC 842 / IFRS 16 disclosures: the weighted-average remaining term and discount rate, the maturity analysis of undiscounted payments, and the current-versus-long-term split of the liability. Nothing is a black box — you can trace any figure back through the schedule.
Export the workpapers or call the API
Create an account to save the lease to a portfolio, roll it forward each period, and model modifications. Export the schedule, journal entries and disclosures to Excel, CSV or PDF in the format your workpapers expect. And because the engine is exposed as a metered JSON API, an OpenAPI spec, an llms.txt manifest and a hosted MCP server, the exact same computation is available to your systems and to AI accounting agents — single-key auth, structured errors, idempotency keys and an inspectable request log.
How a lease is classified
Under ASC 842 the classification decides how the lease is expensed — not how it is measured at commencement. The engine evaluates every criterion and tells you which one was met.
Meets none of the five ASC 842 finance criteria. A single lease cost is recognised on a straight-line basis over the term — the liability accretes interest and the ROU asset amortizes as the balancing figure so total expense stays level. Citation: ASC 842-20-25-6.
Meets at least one of the five criteria (ownership transfer, bargain purchase option, major part of economic life, substantially all of fair value, or specialized asset). Interest on the liability and straight-line amortization of the ROU asset are recognised separately, so total expense is front-loaded. Citation: ASC 842-20-25-5 through 25-7.
No operating/finance split for lessees. Every lease is recognised as a right-of-use asset and a lease liability and accounted for like a finance lease — depreciation of the asset plus interest on the liability. Citation: IFRS 16.22.
The thresholds and criteria are disclosed rather than hidden inside a black box, so a classification made today can be explained and reproduced later — including in front of an auditor.
Three standards, one engine
Ledgerage applies the correct lessee model for each standard and links every result to the paragraph behind it.
ASC 842
United States (US GAAP)
ASC 842 is the US GAAP leasing standard. It requires a lessee to recognise a right-of-use (ROU) asset and a lease liability on the balance sheet for virtually every lease longer th…
IFRS 16
IFRS (international)
IFRS 16 is the international leasing standard. Unlike US GAAP it uses a single lessee accounting model: almost every lease is recognised as a right-of-use asset and a lease liabili…
GASB 87
US state & local government
GASB 87 is the leasing standard for US state and local governments. Like IFRS 16 it uses a single model: a lessee recognises a lease liability and an intangible right-to-use lease …
Deterministic & audit-grade, by design
An AI bookkeeping agent shouldn't hallucinate a right-of-use asset, and a controller shouldn't have to trust a black box. Four properties make every Ledgerage result defensible.
Deterministic, not generative
The engine is closed-form arithmetic — present value, amortization and classification — not a language model. The same inputs always produce the same schedule to the cent, which is exactly what an auditor needs to be able to reproduce.
Reconciled to zero
Every schedule closes the lease liability and the right-of-use asset to zero at the end of the term. If the numbers didn't reconcile, the workpaper wouldn't tie out — so the engine proves it does.
Cited on every result
Every classification criterion and measurement points back to the ASC 842, IFRS 16 or GASB 87 paragraph behind it. The citation travels with the API response and the exported workpaper, so a reviewer can check the basis without leaving the number.
Same engine everywhere
The free web calculator, the saved portfolio, the exports and the API all call one engine. There is no 'lite' calculation — the free result is as accurate as the paid one; the paid tier adds saving, exporting and volume.
See the engine on a real lease.
Free, no account required. Enter a lease now and see the schedule, the journal entries and the cited classification.