The ASC 842 standard requires companies to show all leases on their balance sheets, except short-term ones. This means recognizing a right-of-use asset and a lease liability. Compared to the previous ASC 840 standard, this could lead to higher reported assets and liabilities for some companies. Lessors need to split the contract's payment between lease and nonlease parts. If certain events happen, lessees must review the lease term. Any changes to a lease that weren't in the original agreement and affect the scope or payment are considered lease modifications.