From the course: Accounting Foundations: Leases
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Educating financial analysts and the business press
From the course: Accounting Foundations: Leases
Educating financial analysts and the business press
- Because of potential confusion, companies should proactively educate investors and analysts about the balance sheet impact of the new lease accounting rule that brings operating leases onto the balance sheet. Ah, but some companies aren't doing that education. The new lease accounting standard was adopted in 2016, with an effective date of 2019. This delay gave companies three years to do the computations and educate the public about the impact of putting unrecorded operating leases on the balance sheet. Some companies adopted a new lease accounting standard almost immediately, quickly getting the off-balance sheet information into the hands of the financial statement users. For example, in the notes to its 2016 financial statements, Target announced that the company would implement the newly adopted lease accounting standard in the first quarter of 2018. One year later, in the notes to its 2017 financial statements, Target again confirmed that the…
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