RECENT POSTS
Tuesday, January 8, 2019
A Look at Climate Change Disclosures

Wednesday, January 2, 2019
Quants: Point-in-Time Data for Backtesting

Friday, December 28, 2018
Now Showing: Controls & Procedures

Thursday, December 27, 2018
A Reminder on Non-GAAP Reporting Rules

Monday, December 17, 2018
Researching PG&E’s Wildfire Risk

Wednesday, December 12, 2018
Tracking Brexit Disclosures

Thursday, December 6, 2018
Campbell Soup: Looking Behind the Label

Sunday, December 2, 2018
SEC Comment Letters: The Amazon Example

Wednesday, November 28, 2018
Measuring Big Pharma’s Chemical Dependency

Monday, November 26, 2018
Analysts, Can You Relate? A True Story

Monday, November 19, 2018
Digging Up Historical Trend Data: Quest Example

Sunday, November 11, 2018
Cost of Revenue, SG&A: Q3 Update

Monday, November 5, 2018
Lease Accounting: FedEx vs. UPS

Saturday, November 3, 2018
New Email Alerting Powers

Wednesday, October 31, 2018
PTC and Two Tales of Revenue

Tuesday, October 30, 2018
10-K/Q Section Text Change Detection

Sunday, October 28, 2018
Finding Purchase Price Allocation

Sunday, October 21, 2018
Charting Netflix Growth in Three Ways

Wednesday, October 17, 2018
Interesting Data on Interest Income

Thursday, October 11, 2018
The Decline of Sears in Three Charts

Archive  |  Search:
An Update on Leasing Costs
Wednesday, January 10, 2018

Corporate accountants quietly panicking about the new standard to account for operating leases can breathe a bit easier, although financial analysts curious to dig into those same numbers might need to work a bit harder next year.

The new standard, going into effect at the end of this year, requires companies to state the cost of operating leases on the balance sheet; until now, those costs have been tucked away in the footnotes. Since those lease costs can sometimes be quite large — multiples larger than other liabilities on a company’s balance sheet — the new standard could have a dramatic effect on some retailers, fast food joints, and other businesses. For an overview of impact, have a look at our report “Operating Leases: What Lies Beneath”

The Financial Accounting Standards Board, however, just issued an update saying that when companies do start reporting under the new standard, they will not need to revise prior years’ financial data to follow the new standard. Only leasing costs that exist as of Dec. 15, 2018 (the day the new standard goes into effect) will need to meet the new criteria.

That will be a relief to corporate finance departments, because most of them have barely begun to prepare for the new standard. According to one survey from PwC and CBRE late last year, up to 75 percent of companies are either still assessing the standard’s possible effect, or haven’t begun assessing at all. That’s not good.

On the other hand, financial analysts crave comparability of financial data — and that’s what we won’t have here, because 2018 numbers on the balance sheet will be reported according to a standard different from 2017 and 2016.

Calcbench subscribers will still be able to find all leasing data, of course. Even under the current standard, we track that hard-to-find leasing data in our Multi-Company and Interactive Disclosure pages. You will always be able to find those numbers within a few keystrokes.


FREE Calcbench Premium
Two Week Trial

Research Financial & Accounting Data Like Never Before. More features and try our Excel add-in. Sign up now to try the Premium Suite.