Deck 36 No. 50: The Future of Lease Accounting: A Startup’s Playbook for Financial Agility
James O'Flanagan
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~ How Outdated Standards Punish Flexibility—And Why the Rules Need to Reflect Remote Reality ~
By: James O'Flanagan, MS, FRSA
📌 Author’s Note
Narrative Weight™: ✍️ Intent Declaration | 🎓 Origin Story | 🧬 Foundational Signal
Some articles begin with spreadsheets.
Others, with a hypothesis, purpose or problem statement.
This one begins with four classes I've taken over the years:
🗣️ Speech taught me to hold a room.
⌨️ Typing, on an IBM word processor in 1994, gave me fluency before I knew I’d need it.
💻 Programming 101 introduced recursion—years before Promptspace™.
📚 Accounting taught me how to follow the value.
Said my accounting professor at The University of Akron:
“The accounting goes where the value goes.”
That was the mantra in the Engineering Management program at the University of Akron—a now-defunct degree that trained engineers to speak finance and taught me how systems shape trust.
That idea has stayed with me through every startup, pitch deck, and financial conversation since.
This isn’t just about lease accounting. It’s about what happens when the numbers mislead the mission.
📌 This issue of Deck 36 explores:
✅ Why ASC 842 is misaligned with modern business
✅ How it penalizes agility and distorts optics
✅ What reforms can bring clarity back to strategy
Let’s talk about why the rules must evolve—and how we fix the signal. 🚀
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📌 Article Summary
Narrative Weight™: 🧭 Signal Overview | 🧱 Structural Compression | 🧠 Cognitive Anchor
📝 Author’s Note
Four unlikely classes—speech, typing, programming, and accounting—shaped a framework for trust, precision, and clarity that drives this critique.
🎧 Article Playlist
A curated mix of era-defining tracks mirrors the emotional rhythm of startup life and the timeline of regulatory reform.
🔍 Introduction: Why Lease Accounting Is Holding Startups Back
Modern startups are penalized for being efficient, as ASC 842 forces capital obligations onto operations designed to stay lean.
🏢 The Problem: Lease Accounting Is a Relic
What started as a fix for Enron has become a dragnet for small, agile companies who now suffer from misclassified liabilities.
📊 The Fix: A Smarter Framework for Modern Companies
Startups need rules that reflect their operational truth, with financial thresholds, necessity tests, and hybrid-aware classifications.
📄 ResearchGate Deep Dive: The Paper Behind the Principles
This article builds on a peer-reviewed framework that formalized the math and modeling to back a founder-first accounting reform.
🔄 Key Updates Since My Original Paper
Refinements to thresholds, case studies, investor logic, and remote lease treatment bring the model closer to real-world needs.
💡 What I Learned That Actually Mattered
The most influential education came not from a title, but from foundational skills in speech, typing, logic, and financial literacy.
🎓 The Disappearing Bridge Between Engineering and Business
The closure of programs like Engineering Management shows a dangerous gap forming between technical execution and business fluency.
💬 The Language of Value
If you can’t read a balance sheet, you can’t see where a business is going—and most founders don’t speak the language of value.
💼 Pitching with Numbers
Investors listen with spreadsheets, not ears—so if you don’t know your numbers, your story won’t carry.
📉 Jack Welch and the Myth of Managed Earnings
What Welch called “performance” was really manipulation—and ASC 842 now overcorrects by targeting the honest alongside the guilty.
⚠️ When the Story Breaks: The Lesson of Enron
Enron didn’t just break the rules—it broke the trust, and ASC 842 was built to prevent a repeat, even at the cost of innovation.
🧭 Upholding the Standard: GAAP, FASB, and the Courage to Say “No”
The system only works if someone is willing to stop the slide—Bass and Kaminski did, and their courage still echoes.
🧮 How QuickBooks Helps, But Can’t Think
Automation is powerful, but without human judgment, systems like QuickBooks become fast ways to miss the point.
💭 Why I Wrote This Article
This piece was born of pressure—a bank asking for an office lease that would’ve added nothing but appearances to the balance sheet.
📎 Sidebar: From Enron to ASC 842 — A Timeline of Overcorrection
A step-by-step history shows how scandals led to standards, and how those standards became blind to the startup age.
🔗 Related Deck 36 Ethics & Transparency Pieces
Other issues from Deck 36 connect directly to the ethical backbone of this one, forming a lattice of trust-first narratives.
📑 Conscious Errata
This article includes deliberate simplifications and scoped exclusions to preserve clarity without sacrificing rigor.
📢 Conclusion: The Accounting Goes Where the Value Goes
If the numbers no longer reflect reality, then the system isn't just outdated—it's broken and in need of reform.
📣 Final Thought: What’s Your Take?
If this sparked a reaction in you, that’s the signal—let’s keep the conversation alive and fix what needs fixing.
🧾 Deck 36 Footer: Signal Registered
Every signal in this issue has been verified, weighed, and aligned to structure, trust, and truth—welcome to the ledger.
—
🎶 Article Playlist
🎧Narrative Weight™: 🎵 Emotional Calibration | 📊 Structural Echo | 🧠 Founder’s Signal
🎵 Talking Heads — Once in a Lifetime (1980) A surreal anthem for every founder who woke up in a system they didn’t design—and decided to rewrite it.
🎵 The Clash — Should I Stay or Should I Go (1982) A perfect soundtrack for lease decision anxiety, where every startup move feels like a split-risk coin toss.
🎵 James Horner — Build It and They Will Come (Field of Dreams, 1989) The dreamer’s theme for those building on belief—but forgetting to check the burn rate.
🎵 Dr. Mattie Nottage — If You Build It, He’ll Come (2021) A soul-heavy reminder that some things are built on faith, not forecasts.
🎵 KONGOS — If You Build It (2019) A dark pulse of realism about constructing futures that might not support the weight they promise.
🎵 Fifth Harmony — Work from Home (2016) A glittery pop prophecy that nailed the hybrid revolution before the accountants did.
🎵 ZZ Top — Doubleback (Old West Version) (1990) Marty McFly logic in a cowboy riff—sometimes the future needs a trip to the past with tools that still work.
🎵 ZZ Top — Doubleback (Old West Version) (1990) Marty McFly logic in a cowboy riff—sometimes the future needs a trip to the past with tools that still work.
Video Reference: https://youtu.be/qcDylz37bnY?si=iA43A6aBNJ1OhZWa
—
🔍 Introduction: Why Lease Accounting Is Holding Startups Back
Narrative Weight™: 🧭 Signal Orientation | 📉 Market Distortion Framing | 🧱 Foundational Relevance
There was a time when leasing an office was a symbol of legitimacy—a rite of passage for startups growing into real companies. But in today’s AI-native, remote-first world, that same lease can become a financial anchor dragging agile teams into outdated accounting obligations.
Back in the day, leases meant:
Growth.
Stability.
A long-term stake in the ground.
Fast forward to 2025—and that logic is upside down.
Today we have:
🚀 Startups are remote-first.
🏢 Traditional offices are optional luxuries.
📉 Flexibility reduces risk and preserves capital.
But ASC 842—the lease accounting standard—hasn’t caught up.
It treats nearly every lease the same: whether it’s a corporate headquarters or a month-to-month coworking space, the obligation gets capitalized.
That means:
📈 Financial statements appear bloated b/c liabilities are inflated.
💸 Capital gets locked in the wrong places
🛑 Strategic flexibility is penalized
This one-size-fits-all treatment distorts the true nature of startup operations. It punishes lean, modern companies for avoiding the very overhead that used to define success.
Article Thesis:
“Startups shouldn’t be forced to look less agile just to appear more investable.”
In an economy where agility is the competitive edge, the accounting shouldn’t be working against you.
🏢 The Problem: Lease Accounting Is a Relic
Narrative Weight™: 🕰️ Systemic Drift | 🧼 Regulatory Intent vs. Impact | 📊 Misaligned Optics
Lease accounting wasn’t always like this. What started as a push for transparency has drifted into a system that punishes flexibility and misrepresents reality.
ASC 842 was introduced to close the loopholes exposed by companies like Enron—where long-term lease obligations were kept off the books as “operating leases.” But in trying to fix fraud at the top, the rule now penalizes the very agility that defines modern startups.
A look at Enron's effect on accounting practices:
Link Reference: https://www.leasinglife.com/news/52-take-up-in-us-of-post-enron-lease-accounting-rules/
Here’s how that distortion plays out in the real world:
1️⃣ Financial Statements Get Warped Startups leasing short-term desks or flexible coworking spaces now report inflated liabilities—making them look overleveraged when they’re actually running lean. 📊 This distortion skews key metrics like debt-to-equity and asset intensity, and investors misread the signal.
2️⃣ It Encourages Unnecessary Leasing Because leases now show up as “assets,” some founders feel pressured to sign longer, more expensive leases just to appear stable on paper. 🎯 It’s an optics game that rewards rigidity and punishes strategic restraint.
3️⃣ Capital Gets Locked in the Wrong Places Every dollar committed to real estate is a dollar not going to product, hiring, or customer growth. 💸 And when those lease commitments hit the books, they make agile companies look riskier than they actually are—undermining valuation and access to capital.
📊 The Fix: A Smarter Framework for Modern Companies
Narrative Weight™: 🛠️ Structural Proposal | ✍️ Founder-Aligned Logic | 🧬 Practical Policy Design
The problem isn’t just that ASC 842 is outdated—it’s that it doesn’t reflect how modern businesses actually operate. Startups today prioritize agility, flexibility, and resource optimization, but the current rules treat them like they’re Fortune 500s with fixed assets and permanent headquarters. To fix that, we need an accounting framework that matches the moment.
It’s time to adjust lease accounting standards to reflect the modern business landscape.
Here's how I propose to do it:
✅ 1. Implement Financial Thresholds
Leases above a certain financial impact should be capitalized. Small-scale, short-term leases should remain operating expenses.
✅ 2. Apply an "Operational Necessity" Test
If a leased asset isn’t critical to business operations, it shouldn’t be capitalized as a long-term obligation.
✅ 3. Rethink Remote Work & Hybrid Space Classification
FASB should introduce a new category for co-working spaces, hybrid office solutions, and short-term leases—recognizing their low-risk nature compared to traditional leases.
📄 ResearchGate Deep Dive: The Paper Behind the Principles
Narrative Weight™: 📚 Source Formalization | 📎 Theory-to-Practice Link | 🧠 Signal Provenance
Before this article ever hit your screen, the groundwork was already laid in a peer-reviewed research study. In 2024, I formalized my approach to startup-friendly finance by publishing Modernizing Lease Accounting on ResearchGate.
This paper proposes:
✅ Threshold-Based Capitalization
✅ Operational Necessity Framework
✅ RHWA Proposal
✅ Investor Impact Modeling
✅ Case Studies
🎵 James Horner — Build It and They Will Come (Field of Dreams, 1989) The dreamer’s theme for those building on belief—but forgetting to check the burn rate.
Video Reference: https://www.youtube.com/watch?v=o3c_pJ_CLJQ
💡 Why I Wrote It:
Because startup founders—especially in the AI space—deserve accounting rules that reflect how they actually operate.
🧠 Why It Still Matters:
The paper provides the math, logic, and formal structure. This article? It brings the narrative, intention, and human context.
📎 Read the full study here:
🔄 Key Updates Since My Original Paper
Narrative Weight™: 🔧 Live Revision | 🔬 Contextual Tuning | 📈 Signal Evolution
Since publishing the original ResearchGate study, I’ve refined the framework based on feedback, modeling, and real-world scenarios. These updates make the policy more dynamic, founder-friendly, and aligned with how startups actually operate today.
The paper updates are:
🔹 Financial Thresholds Expanded — The updated framework replaces flat dollar limits with a 5–10% of trailing 12-month revenue threshold for capitalization, exempting low-dollar or short-term leases that fall below this ratio to better reflect financial materiality for early-stage startups.
🔹 New Industry-Specific Case Studies — New examples from SaaS, AI, and biotech startups highlight how ASC 842 penalizes flexible workspace models across vastly different operational needs.
🔹 Enhanced Investor Impact Analysis — The revised paper explores how lease capitalization distorts risk optics in venture due diligence, affecting valuations and funding outcomes.
🔹 Policy Proposals Refined — A proposed RHWA model introduces a new classification for remote, hybrid, and short-term leases—recognizing them as low-capital-intensity costs rather than traditional obligations.
These updates move us closer to an accounting model that reflects startup reality—not just legacy infrastructure.
For the full analysis, read the ResearchGate study here: Modern Lease Accounting paper on ResearchGate.
💡 What I Learned That Actually Mattered
Narrative Weight™: 🎓 Lived Epiphany | 💭 Educational ROI | 🧠 Signal Priming
Some lessons don’t show up on a transcript the way they show up in your life. The four most valuable classes I ever took didn’t just teach skills—they shaped how I build, lead, and make decisions today. They also had a huge effect on this work, my company OAPSIE•Inc., and my time in school.
The four classes are:
🗣️ Speech (1998, John Carroll University) Public speaking scared me. But that course taught me how to pace a room, command presence, and explain complex ideas clearly—skills I now use daily as a teacher, founder, and communicator.
Link Reference: https://www.jcu.edu/
⌨️ Typing (1994, Woodridge High School) It was a timed typing course on IBM word processors, back when speed drills were done in green text. That early muscle memory shaped how I think through my fingers—and still powers how I write and work today.
Link Reference: https://whs.woodridge.k12.oh.us/
👨💻 Programming 101 (1996, Woodridge High School) Mrs. Hammond’s class introduced me to Pascal, loops, logic, and recursion—my first glimpse of how code mirrors thought. That same recursive structure now lives at the core of how I build Promptspace™ and design AI workflows.
Link Reference: https://en.wikipedia.org/wiki/Woodridge_High_School
📚 Accounting (2007, University of Akron – Master’s Program) This was the class that changed how I see business. My professor taught us that “the accounting goes where the value goes”—a line that still guides how I build systems, read companies, and earn trust.
Link Reference: https://www.uakron.edu/engineering/
🎓 The Disappearing Bridge Between Engineering and Business
Narrative Weight™: 🌉 Structural Loss | 🛤️ Interdisciplinary Decay | ⚙️ Reform Memory
I first heard about The University of Akron Engineering Management program in 1999, while pursuing my Computer Engineering degree at Case Western Reserve University. During a class session, they handed out flyers for Case's version of the program—designed for students who were passionate about engineering but also eager to understand the business side of technology.
I was already enrolled in economics courses at the time, and the program's blend of technical and managerial education immediately resonated with me. This program wasn’t just theoretical; it aimed to create professionals who could have depth and breadth in their skillsets.
An article in campus paper The Buchtelite from 2018 about the Engineering Management program close at The University of Akron:
Link Reference: https://buchtelite.com/36085/news/the-complete-list-of-programs-cut-at-the-university-of-akron/
Some program highlights:
🛠️ Engineer solutions with a business mindset
📊 Analyze systems through both technical and financial lenses
🧠 Bridge the gap between product development and strategic planning
🎵 Talking Heads — Once in a Lifetime (1980) A surreal anthem for every founder who woke up in a system they didn’t design—and decided to rewrite it.
Video Reference: https://vimeo.com/995450662
I later enrolled in this very program for my master’s degree, and the insights I gained continue to influence every project I undertake. Unfortunately, the program was discontinued in 2012 due to declining enrollment and budget constraints, reflecting a broader trend of universities scaling back interdisciplinary programs that bridge technical and business disciplines.
US News' ranking of the The University of Akron:
Link Reference: https://www.usnews.com/best-graduate-schools/top-engineering-schools/university-of-akron-main-campus-02141
💬 The Language of Value
Narrative Weight™: 📘 Fluency Signal | 💸 Financial Literacy Anchor | 🧭 Translation Layer
Startups rise and fall not just on product or vision—but on whether they can follow the flow of value. And value, in business, has a language.
“Accounting is the language of business.”
— Warren Buffett
That line isn’t metaphor—it’s operating truth. If you want to understand a business—not just sell into it, pitch it, or work at it—you have to understand how it speaks in numbers.
Buffett learned this early, reading The Intelligent Investor by Benjamin Graham. That book, more than any spreadsheet or stock chart, gave him the mental model he still uses today: Value isn’t what the market says—it’s what the books reveal.
Book Reference: https://a.co/d/cWPRUEc
Graham taught that reading financials isn’t about precision; it’s about comprehension. A balance sheet tells you where the business stands. An income statement shows how it moves. A cash flow statement reveals what’s real. Together, they form the story.
Some finance truths I learned from these books:
📘 If you can’t read a balance sheet, you can’t understand the business.
📘 If you can’t follow the income statement, you can’t follow the value.
📘 If you can’t trace the signal, you’re guessing at the truth.
Book Reference: https://a.co/d/6S1RJ3h
This is why accounting matters—not as compliance, but as clarity.
If you can’t read a balance sheet, you can’t understand the business. If you can’t follow the income statement, you can’t follow the value.
💼 Pitching with Numbers
Narrative Weight™: 💬 Trust Fluency | 📊 Evaluation Protocol | 📍 Founder Signal Check
In every pitch deck, knowing your financials isn’t optional—it’s entry-level fluency in trust.
If you don’t speak accounting, you don’t speak finance. If you don’t speak finance, you don’t get funded.
Said Buffett to Alice Schroeder:
If you don’t speak accounting, you don’t speak finance. If you don’t speak finance, you don’t get funded.
Investors aren’t just evaluating your product—they’re evaluating your judgment. They want to know you understand burn, runway, margin, and revenue recognition—not just because it’s required, but because it’s signal. A founder who doesn’t know their own numbers raises red flags—no matter how good the story sounds. Accounting fluency doesn’t just earn capital—it shows you know what kind of business you're actually building.
📉 Jack Welch and the Myth of Managed Earnings
Narrative Weight™: 🎭 Illusion Exposure | 🚨 Precedent Risk | 🧼 Narrative Manipulation
In his memoir Straight from the Gut, former GE CEO Jack Welch proudly recalled a moment when his team used lease timing to hit earnings expectations. They had missed their quarter—but through what he described as “pulling forward some lease revenue,” they closed the gap. He framed this not as manipulation, but as heroic teamwork—a selfless act by high performers doing what needed to be done.
When I read that passage, I felt sick to my stomach.
It wasn’t just what he did. It was how casually it was presented—as if bending financial reality to match a narrative wasn’t just acceptable, but admirable.
Link Reference: https://harpers.org/2012/10/why-jack-welch-knows-about-changing-numbers/
Imagine being a junior finance leader in that room. Imagine knowing the math was off—knowing the story was wrong—and having to choose between your integrity and your career… with a legend like Jack Welch staring you down.
What would you do?
🎵 The Clash — Should I Stay or Should I Go (1982) A perfect soundtrack for lease decision anxiety, where every startup move feels like a split-risk coin toss—just like navigating the Upside Down without a map. Stranger Things turned this into an interdimensional warning: when the walls start speaking, you better decide fast.
Video Reference: https://www.youtube.com/watch?v=IeQ3zAZCTAU
This is exactly the kind of behavior ASC 842 was designed to prevent—no more lease games, no more earnings theater. But in correcting for Welch-style distortion, the rule went too far. It now penalizes founders who are doing the opposite—operating lean, staying agile, and telling the truth.
ASC 842 tried to fix a legacy problem. But it missed the future.
If you're interested in the aforementioned Jack Welch Biography, you can check it out on Amazon:
Link Reference: https://a.co/d/63qHzrQ
Define Irony:
The company that made Six Sigma famous was led by a man who bragged about making decisions "Straight From The Gut."
Sometimes you can't make this stuff up.
⚠️ When the Story Breaks: The Lesson of Enron
Narrative Weight™: 💣 Systemic Collapse | 📉 Trust Breakdown | 🧱 Narrative Drift Limit
Enron hid billions off the balance sheet. They used special-purpose entities and lease tricks to create the illusion of stability—while masking real risk. It worked until it didn’t.
Sherron Watkins told the truth. But by the time she spoke up, the narrative had already broken loose from reality. On paper, Enron looked like a world-class company. In practice, it was a collapse waiting to happen.
What people forget is how admired Enron was before it fell. When I was younger, it was held up as a model company. The company I worked for at the time even copied one of their internal policies: “Two strikes and you're out”—meaning two bad performance reviews in a row and you were fired, no exceptions.
It wasn’t just accounting tricks that got adopted—it was a whole management ethos.
Metric obsession.
Stack ranking.
“High performer” culture.
Performance theater.
And it spread across the corporate world like gospel.
Then came Sarbanes-Oxley.
Then Madoff.
Then Theranos.
Different headlines.
Same problem.
The numbers got disconnected from the business beneath them. ASC 842 was meant to fix that. No more off-book leases. No more shell games. But it swung too far. Today, the rule punishes honest, lean companies just for being flexible.
We’ve traded omission for distortion—and still missed the point.
If Enron taught us anything, it’s this:
📉 When the story drifts from reality, collapse is only a matter of time.
🧭 Upholding the Standard: GAAP, FASB, and the Courage to Say “No”
Narrative Weight™: ⚖️ Ethical Backbone | 💼 Governance Signal | 🔐 Line-Holding
GAAP and the Financial Accounting Standards Board (FASB) were created to protect trust in financial reporting. But no rule enforces itself. At the end of the day, someone has to look at the numbers—and say no.
During the Enron collapse, two people did exactly that:
👨💼 Carl Bass, a senior partner at Arthur Andersen, refused to sign off on Enron’s accounting structures. He raised internal objections to their off-book entities and was removed from the account. His ethics nearly cost him his career.
🧠 Vincent Kaminski, Enron’s head of risk, also pushed back. He challenged Andy Fastow’s financial models and warned executives that the structure was unstable. When leadership tried to delete internal emails, Kaminski’s team ensured the records were preserved.
These weren’t retrospective heroes. They made the hard calls in real time—under pressure, against power, and with a lot to lose.
Their actions are chronicled in several key books:
📘 The Smartest Guys in the Room by Bethany McLean and Peter Elkind
📘 Conspiracy of Fools by Kurt Eichenwald
📘 Power Failure by Mimi Swartz with Sherron Watkins
📘 Anatomy of Greed by Brian Cruver
Those books don’t just document a corporate failure. They reveal the deeper collapse of narrative integrity—when earnings optics replaced ethical reality.
Accounting standards mean nothing without people willing to apply them with courage.
Carl Bass and Vincent Kaminski didn’t stop the Enron collapse. But they did preserve the story.
And in a system built on trust, that still matters.
🧮 How QuickBooks Helps, But Can’t Think
Narrative Weight™: 🤖 Automation vs. Intention | 🪞 Judgment Gap | 🧠 Human Oversight
I use QuickBooks every week. It automates beautifully—organizing transactions, generating reports, and keeping my books clean. But QuickBooks doesn’t understand nuance, risk, or ethics. It can fill out your P&L—but it can’t explain what it means, or whether your decisions align with the long-term health of your company.
That’s still our job.
And that’s why every entrepreneur needs to understand accounting. Because finance is the language of business. No matter what field you're in, eventually, you'll need to understand how capital flows—through financing, investment, or simply managing the basics of operations.
QuickBooks is great for automation. But to run a business, you still need to know what makes money move—why it moves, and whether that movement reflects legitimate, sustainable value creation.
Intention matters. That’s what my accounting professor taught me. And I’ve believed him ever since.
QuickBooks Online Pro's & Con's from NerdWallet:
Link Reference: https://www.nerdwallet.com/reviews/small-business/quickbooks-online
💭 Why I Wrote This Article
Narrative Weight™: ✍️ Author’s Intention | 🔁 System Repair Impulse | 🫀 Founder POV
I run a lean, profitable company.
(I also teach 5 days a week... Life is short!)
We don’t need a lab or a showroom—just a laptop and intent. And yet, I’ve felt pressure to rent an office I don’t need.
That pressure came not from clients—but from accounting logic.
When I applied for financing, a banker at Chase asked, “Where’s your office?” Not what do you build or how do you serve. Just: show me the building.
Because in traditional finance, a lease still signals legitimacy. A physical office becomes an “asset”—even if it adds no value to the business.
That’s why I wrote this.
We’re still trapped in a system where balance sheet appearances can steer real-world decisions.
Here’s how I actually work:
🪑 Home office most days.
🏛️ Shared workspace when I need to impress.
📚 Library or Panera when I want ambient energy.
🎓 Teaching the next generation the business of building.
🎵 Fifth Harmony — Work from Home (2016) A glittery pop prophecy that nailed the hybrid revolution before the accountants did.
Video Reference: https://www.youtube.com/watch?v=-XqrD6y1N1s
Why would I ever sacrifice productivity for presence in an office when there's no reason for it?
Riiiiiight. There needs to be a reason. That's what makes things go-round now. I don’t hate lease accounting. I just know how easily it can distort what’s real. It’s time to stop measuring health by the square footage of the signal—and start measuring it by the work itself.
Performative work was for the 1990's. Actual output is a better way to account for someone's contribution to a team.
In my humble opinion, of course.
Link Reference: https://oapsie.com/contact
📎 Sidebar: From Enron to ASC 842 — A Timeline of Overcorrection
Narrative Weight™: 🧩 Contextual Lineage | 🕰️ Regulatory Backstory | 📚 Signal Trail
Lease accounting didn’t become front-page news by accident. It was born out of scandal, regulation, and the desire to close loopholes—but it hasn’t kept pace with how real businesses work.
📉 2001 → Enron collapses The most admired company in America implodes—brought down by accounting distortions, off-book liabilities, and a culture that rewarded financial illusion over operational truth.
📜 2002 → Sarbanes-Oxley passes Congress responds with sweeping reforms to improve corporate accountability, strengthen internal controls, and reestablish public trust in financial statements.
🧾 2016 → ASC 842 is issued To eliminate loopholes like those used by Enron, FASB mandates that nearly all leases—long-term or short-term, material or marginal—must appear on the balance sheet.
🚀 2010s → The startup boom accelerates New founders, lean teams, and AI-native companies embrace flexibility over footprint. But the new rules penalize them for the very thing that makes them agile—not having fixed, long-term leases.
🦠 2020 → The COVID-19 pandemic hits Remote work becomes not just viable, but essential. Businesses across every industry leave their office leases behind—and keep moving forward.
🌐 2021–2023 → Hybrid work becomes the norm Co-working, flexible leases, and shared-use agreements dominate the new workplace economy. But ASC 842 still treats them like traditional liabilities—creating friction for companies that are actually adapting in real time.
📅 2024–2025 → Today We’re in an era where most founders no longer think in square footage—but accounting rules still do. The intent was to increase transparency. The outcome? Startups now look riskier for being efficient.
It’s not that the story was wrong in 2001—it’s that it’s no longer the story we’re living in now.
🎵 Dr. Mattie Nottage — If You Build It, He’ll Come (2021) A soul-heavy reminder that some things are built on faith, not forecasts.
Video Reference: https://www.youtube.com/watch?v=1a1YqGG7_rE
🔗 Related Deck 36 Ethics & Transparency Pieces
Narrative Weight™: 🧬 Network Linkage | 🔍 Continuity Signal | 📁 Recursion Anchor
Every article in this section connects through a shared signal—each one part of the larger ethical spine of Deck 36. Whether it's AI, education, inclusion, or personal boundaries, these pieces explore how transparency and trust hold systems—and people—together.
📄 Deck 36 No. 48 – The AI Data Trade-Off: Convenience or Privacy?: An in-depth look at how modern AI systems exchange user data for personalization—raising questions about identity, bias, transparency, and the ethical boundaries of machine learning in everyday life.
Link Reference: https://www.linkedin.com/pulse/deck-36-issue-48-ai-data-trade-off-convenience-o-flanagan-ms-frsa-jygec/
Deck 36 No. 30 – Blurred Lines: Navigating Personal Ties in Professional Spaces: A deeply personal reflection on the complexities of working alongside family, students, and community—offering insight into how boundaries, trust, and emotional clarity are essential in maintaining integrity within human-centered systems.
Link Reference: https://www.linkedin.com/pulse/d36-30-blurred-lines-navigating-personal-ties-james-o-flanagan-bjmyc/
Deck 36 No. 8 – EDI’s Favorite Color Is Green: A vivid exploration of how equity, design, and inclusion (EDI) show up in everyday engineering decisions—using the color green as a metaphor for sustainability, access, and the subtle ways our values shape what we create.
Link Reference: https://www.linkedin.com/pulse/deck-36-8-edis-favorite-color-green-james-o-flanagan-ew26c/
Oapsie Kindness Rules: A thoughtful reflection on how kindness, intentional structure, and unwavering belief in others can transform both engineering education and the way we show up in the world.
Link Reference: https://www.linkedin.com/pulse/oapsie-kindness-rules-james-o-flanagan-hnkpc/
📑 Conscious Errata
(Narrative Weight™: 🧼 Transparency | 🧭 Ethical Clarity | 🛠️ Trust Calibration)
This article reflects lived experience, evolving policy critique, and updated modeling—not a fixed compliance document. These are conscious omissions, simplifications, or areas that could evolve in future versions.
They are:
🔸 International Standards Not Covered This piece focuses on ASC 842 (U.S. GAAP). It does not cover IFRS 16, though many of the arguments for startup-friendly reform apply globally.
🔸 Not All Leases Are Equal Certain industry-specific lease types (e.g., aviation, retail anchor tenants, build-to-suit arrangements) were intentionally excluded to focus on early-stage startup cases.
🔸 Tax Treatment Not Addressed The article does not explore the tax implications of capitalized leases under ASC 842, as the emphasis is on financial optics and valuation—not deferred tax modeling.
🔸 Investor Behavior Generalizations Statements about VC interpretation of lease risk are based on personal pitch experience and founder feedback, not a controlled empirical study. Future work may include more structured investor interviews or fund-side data.
🔸 FASB Process Simplified Descriptions of the FASB rulemaking process are intentionally streamlined for clarity. Full regulatory nuance can be found at fasb.org.
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📬 If you have corrections, additions, or lived counterexamples—email me: jim@oapsie.com Let’s keep the conversation open and honest.
📢 Conclusion: The Accounting Goes Where the Value Goes
Narrative Weight™:📍 Systemic Realignment | 🧭 Signal Restoration | 💬 Call-to-Conscience
If the rules don’t reflect the business model, the rules aren’t just outdated—they’re broken.
Accounting should support business growth, not stifle it. It should reward clarity, not punish flexibility. When the math no longer matches the mission, it’s not just a compliance issue—it’s a trust issue.
Let’s fix the math. Let’s follow the value. Let’s make the numbers mean something again—not just to auditors, but to founders, funders, and the people actually building the business.
Some things to consider:
🚀 Startups don’t need artificial optics—they need financial agility.
💼 The remote work revolution isn’t temporary—it’s foundational.
📊 The hybrid workplace is not an exception—it’s the new default.
If the way we work has changed, the way we measure it must change too. It’s time for FASB to adapt.
Because when accounting becomes disconnected from operational truth, it stops serving business—and starts shaping it in all the wrong ways.
In Conclusion:
If we want founders to make good decisions, we have to stop rewarding bad optics.
📣 Final Thought: What’s Your Take?
Narrative Weight™: 🗣️ Invitation to Reflect | 🤝 Trust Loop | 🔁 Community Signal Echo
If the numbers don’t tell the truth, what exactly are we building—and who are we building it for?
We talk about value all the time. But how many people actually know how to see it in a balance sheet? Or track it through a P&L?
What class flipped that switch for you?
📬 Email me: jim@oapsie.com — I read everything.
Do you think lease accounting should reflect how real startups actually work—not just how legacy businesses used to?
💬 Drop your take in the comments.
📣 Share this with someone in finance, policy, or FASB.
👥 If you’ve lived this pressure—let’s talk.
We need to fix this together—or change may never happen.
🧾 Deck 36 Footer: Signal Registered
Narrative Weight™:🌀 Loop Closure | 🧠 Structural Integrity | 📡 Signal Verification
🧠 This issue was built using the Narrative Weight™ framework—where structure, tone, and trust alignment matter as much as content.
📊 Every argument in this piece was tested for:
💡 Relevance to lived experience
🛠️ Alignment with founder and funder realities
🧭 Ethical clarity and trust calibration
🌀 Terms like Recursive Drift, Promptspace, Signal Ledger™, and Remote & Hybrid Workspace Accounting (RHWA)™ are part of an evolving language designed to help builders see what matters sooner.
💬 If this article moved you, challenged you, or matched something you’ve lived—email me: jim@oapsie.com 📣 Want to republish this in your org’s newsletter or policy deck? Ask. 📎 Want a workshop on this for your team, class, or board? Let’s talk.
🎵 KONGOS — If You Build It (2019) A dark pulse of realism about constructing futures that might not support the weight they promise.
Video Reference: https://youtu.be/NVC3e5pOwEE?si=FtFzXBy47dvscHxu
📚 Powered by lived experience, ResearchGate data, and systems that remember.
📍 Published via Deck 36 and OAPSIE•Inc.
🛤️ Built in public. Built with care. Built to echo.
#NarrativeWeight #Promptspace #SignalLedger #Accounting #RemoteWork #StartupPolicy #TrustStructures #ASC842 #Deck36
James O’Flanagan, MS, FRSA, is the founder of OAPSIE•Inc. and a public educator, mechanical engineer, and writer. He publishes Deck 36 every other week and believes in kindness, clarity, and building slow internet.
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