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Recently the FASB has promoted changes in lease accounting that effectively treat all leases as capital...

Recently the FASB has promoted changes in lease accounting that effectively treat all leases as capital leases. How might the new standard influence investor decision making?

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Answer #1

This change will require organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases.

This change responds to requests from investors and other financial statement users for a more faithful representation of an organization’s leasing activities .

It will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements.

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