From the course: Accounting Foundations: Leases
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The Gap: Estimated implied value of assets under lease contracts
From the course: Accounting Foundations: Leases
The Gap: Estimated implied value of assets under lease contracts
- In its financial statements for the year end of February 2nd, 2019, the Gap wrote this about its leases. "We lease most of our store premises and some "of our corporate facilities and distribution centers. "These operating leases expire at various dates "through 2038." Remember, because these leases are classified as operating leases, they are not reflected in the Gap's reported balance sheet numbers. None of the leased assets are reported in the $8.049 billion of total assets, and the obligation to make the future lease payments is not reported in the $4.496 billion of total liabilities. Now, in the notes to its financial statements, the Gap does give some detail about the future lease payments to be made under these operating lease contracts. The obligation to make future payments on these non-cancelable operating leases totals $5.93 billion, and recall that this obligation is not reported anywhere in the Gap's…
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