In developing the right-of use （ROU） model on lease accounting, the FASB and the IASB decided that in a lease contract the lessee has bought a ROU asset as a non-financial asset. However, the FASB uses the annuity-type pattern to change the carrying amount of operating lease ROU asset in ASC 842. It would be inconsistent with that decision. This study examines the applicability of the annuity method of depreciation to verify the hypothesis: the lessee has not bought a ROU asset but has obtained operational flexibility, which the IASB mentioned in IFRS 16. The results show that the annuity method can be best explained by an expense recognition pattern that varies based on the residual value of the underlying asset.