In 2016, the Financial Accounting Standards Board (FASB) released a new set of lease-accounting standards that require companies to change how they report on their operating leases. Instead of mentioning leases only in the footnotes of their filings, they will now need to report a right-of-use asset and a lease liability on the balance sheet for each operating lease. This change was a result of a U.S. Securities and Exchange Commission (SEC) initiative to close accounting loopholes and increase transparency into the financial position of companies.

The new lease-accounting standards are known as ASC 842, and public companies are required to apply them for annual reporting periods after December 15, 2018. For public companies with a fiscal-year start on the first of the year, that means their deadline will be January 1, 2019. Private companies will be required to apply the standards for annual periods after December 15, 2019—one year later.