CFO magazine reported in a recent post that bankers are warning that altering lease accounting could significantly change a borrower’s balance-sheet profile, possibly making it look more leveraged than it actually is.
The changes could also worsen the financial ratios that govern a loan’s covenants, to the point where the borrower is in violation of its agreement with the bank, CFO said.
CFO noted that whatever changes the boards do make, however, one thing is nearly certain: the assets and liabilities of what are now operating leases will henceforth be recorded on corporate balance sheets.
To read the CFO.com news post click here.
No tags available
Active members of the equipment leasing and finance industry are often familiar with the super-priority rule contained in Article 9 of the UCC. Under certain circumstances, this rule allows a party that takes possession of chattel paper in connection with... read more
At this time last year, it was pretty clear U.S. commercial truck chassis and equipment sales would keep rising through the end of 2015 and into 2016. However, there was some debate surrounding the anticipated growth rate. After commercial truck... read more