Lease accounting standard has been dramatically revised in recent years. The entities that play a role of a lessee have seen their price decline, mainly due to the recently effective FASB ASC 842. Read Chap 15 Lease-Accounting Rules May Have Hurt Companies’ Valuations, Study Says – WSJ.pdf from WSJ and answer the following questions: What authoritative requirements made “a recent change in how companies are expected to account for and report operating leases on company balance sheets”? What are operating leases? How are they shown on corporate balance sheets? Describe measuring an amount to be included on the balance sheet and the accounts that are affected. Consider your answer to the question above. How is it possible that accounting prior to the new lease accounting standard might not show leases on the balance sheet?
