Big Hit from Lease Changes

Moving leases onto balance sheet would boost companies’ debt by 11%: study.

Proposed changes in the way companies account for leases would boost the debt on U.S. companies’ balance sheets by 11%, which could increase the volatility of their earnings and make it harder for them to get financing, according to a study released today by the Equipment Leasing & Finance Foundation.

The Financial Accounting Standards Board and the International Accounting Standards Board have proposed altering accounting rules to require companies to put most leases on their balance sheets. Currently companies report operating leases in the footnotes of their financial statements.

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