Commercial leases, under ASC 842 set by FASB, are noted on balance sheets as both assets and liabilities. This standard mandates companies to recognize the right-of-use (ROU) asset and its corresponding lease liability for the majority of leases. ASC 842, also known as Accounting Standards Codification 842, is a Financial Accounting Standards Board (FASB) accounting standard that outlines the new rules for lease accounting.