Lease Liability

Definition

A balance sheet obligation recognized under ASC 842 representing the present value of remaining lease payments a lessee is obligated to make over the lease term. The liability is reduced as payments are made and accretes with interest expense over time, similar to an amortizing loan. Lease modifications, reassessments of renewal options, or changes in the lease term require remeasurement of the lease liability and a corresponding adjustment to the right-of-use asset.