Final answer:
The record year-end adjusting value for a lease involves making adjustments to accurately reflect the leasing arrangement in the financial statements, involving recognition of expenses, liabilities, and in some cases re-measurement of lease liability.
Step-by-step explanation:
The record year-end adjusting value for a lease refers to the adjustment made to the financial statements of a company at the end of the accounting period to reflect the current value of a leasing arrangement. This involves recognizing expenses associated with the leased asset and adjusting the liability on the balance sheet. For example, in an operating lease, a lessee would recognize lease expenses on a straight-line basis over the lease term. However, with the introduction of new accounting standards such as IFRS 16 and ASC 842, lessees are now required to recognize a right-of-use asset and a corresponding lease liability on the balance sheet for almost all leases.
The adjusting entries related to leases at year-end ensure that the financial statements present an accurate view of the company's obligations and resources. They include recognizing any interest expense on the lease liability and amortization of the right-of-use asset. These adjustments affect the income statement and balance sheet and may also involve re-measurement of the lease liability if there are changes to lease terms or assessments of the lease term.