Accounting for Lease Liabilities and Right-of-Use Assets in Lessee Entities and Their Impact on Financial Reporting Indicators

This article examines the accounting treatment of lease liabilities and right-of-use (ROU) assets in lessee entities and analyzes their influence on key financial reporting indicators. The recognition of lease transactions has become an important area of modern financial accounting because leasing represents a significant source of financing for the acquisition and use of property, equipment, vehicles, production facilities, office premises, and other long-term assets. The application of contemporary lease accounting principles requires lessees to recognize both a right-of-use asset and a corresponding lease liability for most lease arrangements, thereby providing financial statement users with a more complete representation of an entity’s contractual obligations and economic resources. The study focuses on the initial recognition, subsequent measurement, depreciation, impairment, remeasurement, and presentation of right-of-use assets and lease liabilities in the financial statements of lessee entities. Particular attention is paid to the relationship between lease accounting and such indicators as total assets, total liabilities, equity, operating expenses, finance costs, profit before tax, net profit, EBITDA, debt-to-equity ratio, return on assets, return on equity, and liquidity indicators. The research demonstrates that the recognition of ROU assets generally increases the reported asset base, while the recognition of lease liabilities increases the level of reported liabilities and may significantly affect financial leverage. At the same time, depreciation of the ROU asset and interest expense on the lease liability influence profit and expense structures differently from traditional operating lease accounting. The article emphasizes that appropriate recognition and measurement of lease transactions improve the transparency, comparability, and reliability of financial reporting. Effective lease accounting also enables management, investors, creditors, and other stakeholders to assess the entity’s actual financial commitments and the economic consequences of leasing decisions more accurately. The study concludes that systematic accounting for ROU assets and lease liabilities is essential for ensuring faithful representation of an entity’s financial position and for improving the analytical value of financial statements.