LeaseAccelerator published a report listing the off-balance sheet lease obligations of the 500 largest U.S. public companies. The report, entitled “Who is Most Impacted by the New Lease Accounting Standards?” aims to provide greater awareness of the potential impact of the new lease accounting standards.
Both the recently announced IFRS 16 and the forthcoming FASB ASC 842 will require companies to transfer their operating leases, previously only disclosed in the footnotes of their financial reports, onto their balance sheets starting in 2019. They will replace IAS 17 and ASC 840 (formerly FAS 13), respectively. According to the International Accounting Standards Board, listed companies around the world have around $3.3 trillion of leasing commitments, over 85% of which do not appear on their balance sheet.
The companies that will be most impacted by the new capital lease accounting standards will be those with the largest operating lease obligations. The off-balance sheet leases for a specific company can range from a few million dollars, on the low end, to tens of billions of dollars, on the high end.
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