Reassessment
Related terms
Category
ASC 842
Reassessment is the process of re-evaluating lease terms when a significant event or change in circumstances occurs that is within the lessee's control. Under ASC 842 and IFRS 16, reassessment triggers include changes in the likelihood of exercising renewal options, purchase options, or termination options.
Why it matters
Reassessment determines whether lease liabilities and ROU assets need to be updated mid-lease. If a lessee originally expected a 5-year term but now reasonably expects to exercise a 3-year renewal, the lease must be reassessed. changing the remaining payments, discount rate (under IFRS 16), and balance sheet amounts. Missing a reassessment trigger creates misstatement risk.
How Arvexi handles this
Arvexi monitors reassessment triggers and alerts accounting teams when lease terms may need re-evaluation. When a reassessment is confirmed, the platform automatically recalculates the lease liability and ROU asset using the revised lease term and updated inputs.