The right (license) that is granted by a lessor to a lessee to hold, operate or occupy a leased asset over the term of the lease. The right-of-use asset is measured as the total amount of initial amount of the lease liability, plus any lease payments made before lease commencement, plus initial direct costs, minus any lease incentives.

Under mainstream accounting practices, right of use asset is depreciated over the lease term or over the useful life of the underlying leased asset. The asset is to be depreciated over the useful life of the leased asset, if the lessee gets title of ownership of the asset at the end of the lease term, or if it is certain that the lessee will exercise the purchase option.

It is known for short as ROU asset.