Right-of-use asset

At lease commencement, a lessee normally recognises a right-of-use asset and a lease liability, subject to eligible recognition exemptions. The asset begins at cost, including the initial lease liability, eligible initial direct costs, payments made at or before commencement less incentives received, and qualifying restoration obligations. It is subsequently depreciated and assessed for impairment, with adjustments where the standard requires. The asset is the right to use the leased item; it is not necessarily ownership of the underlying item.