Lease Accounting Month-End Checklist

A lease accounting month-end workflow is a structured set of tasks and processes that need to be completed at the end of each month to ensure accurate financial reporting and compliance with lease accounting standards. This workflow encompasses various activities, including reviewing new leases, reconciling lease expenses, preparing reports, and creating journal entries.

Lease modifications can impact financial reporting, so reviewing them ensures your lease data and accounting remain accurate.

It ensures that all lease-related transactions are recorded correctly, which impacts your financial statements and compliance.

The four steps in the closing process are closing revenue accounts to Income Summary, closing expense accounts to Income Summary, closing the Income Summary balance to Retained Earnings, and closing dividends or withdrawals to Retained Earnings. This process resets all temporary accounts to zero so they're ready for the next accounting period. It ensures that revenue and expense balances don't carry forward and that the balance sheet accurately reflects the company's financial position. Most accounting software automates this process, but understanding the underlying entries is essential for audit readiness and error resolution.

Month-end close is the process of reviewing, reconciling, and finalizing all financial transactions for the period before producing financial statements. It typically involves reconciling bank and balance sheet accounts, recording accruals and adjusting journal entries, reviewing the trial balance for errors, and closing temporary accounts. For teams managing leases under ASC 842 or IFRS 16, month-end close also includes updating lease schedules, generating ROU asset and liability entries, and ensuring any lease modifications or new commencements are reflected. A clean, repeatable close process reduces audit risk and gives leadership accurate financials on a predictable schedule.