Many leases convert to what's called "month-to-month" after an initial term. The lessee should consider the same factors for these leases as it would for other leases. Such factors include contract-based, asset-based, market-based, and entity-based factors to determine the term and payments for which the lessee is reasonably certain to extend the lease. In Crunchafi Lease Accounting, enter a revision to extend the lease.
Note: A lease that is “month to month” is not a short-term lease, which ASC 842 defines as “A lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.”
