You can enter an amount to be added to or subtracted from the right-of-use asset at initial setup. This can be either a positive or negative value.
This is most commonly used for setting up a different asset and liability when taking over a lease as part of a business combination, such as to recognize favorable or unfavorable lease terms, or where a lease may be assigned an asset value as part of the purchase valuation that is not directly connected to the present value of the rents.
The adjustment is amortized over the depreciation life of the lease (lease term or economic life).
Asset Adjustments for AROs
This permits you to set up the ARC asset at inception at a different value than the ARO liability. This is primarily useful for business combinations where the asset and liability are valued separately. Enter the amount by which the asset should vary from the liability; for instance, if the liability is 10,000 and the asset should be 8,000, enter -2,000.