What a Lease Does to Your Balance Sheet
Last updated: September 2026
Entities applying AASB 16, the Australian accounting standard for leases, generally show a printer lease on the balance sheet as a right of use asset with a matching liability.
Many small businesses never do.
Enquired on Monday and had a printer installed by Friday. Fast, easy, and exactly what we needed.
We have been using Global Document Solutions for about eight years now and would not go anywhere else.
Ask us how a lease would sit on your books
Quick formTwo pictures of the same agreement
If the lease stays off the balance sheet, the accounts show a monthly expense and nothing else. Assets and liabilities are unaffected.
Where AASB 16 is applied, the accounts show a right of use asset and a matching liability, and the expense splits into depreciation and interest.
Same agreement, same cash, two different sets of accounts.
Your bank might care
Lenders often measure gearing, meaning debt against equity, and interest cover, meaning earnings against interest.
Recognising a lease liability increases the debt side of gearing, and splitting the payment moves part of it into interest.
Where covenants are measured on those ratios, the presentation matters even though nothing about the underlying obligation has changed.
For a business with no covenants and no external reporting obligation, this is largely theoretical.
Questions to ask early
- Which accounting framework your entity actually reports under.
- Whether any bank covenant is measured on gearing, on assets, or on interest cover.
- Whether your existing agreements are already recognised, so a new one is treated consistently.
- This page is general information about how these arrangements are commonly treated in Australia. It is not tax advice. Your structure, your finance arrangement and the year all change the answer, so confirm your own position with your accountant.
Common questions
Does a printer lease go on the balance sheet?
It depends on the accounting framework.
Entities applying AASB 16 generally recognise a right of use asset and a matching lease liability.
Many small businesses preparing special purpose accounts do not.
Will leasing affect my bank covenants?
It can, where covenants are measured on gearing, assets or interest cover, because recognising a lease liability changes those ratios.
The underlying obligation is the same either way, but the presentation differs.
Is off balance sheet treatment better?
It is not inherently better or worse.
It is a reporting outcome that follows from the framework your entity applies, not something chosen for advantage.
Your accountant determines which applies to you.
Does the equipment become my asset on a lease?
On an operating lease the financier owns the equipment throughout.
Where AASB 16 applies you may recognise a right of use asset, which represents your right to use it for the term, not ownership of the device.