FASB Leases Analysis
In the US, FASB’s new standard on leases, ASC 842, will come into mandatory effect in January 2019. The new standard will require companies to report leasing costs on the balance sheet, rather than in the notes to the accounts. Leasing debt will be reported as a liability, and “right of use” as an asset, potentially making dramatic differences to balance sheets and a host of financial ratios.
Last week Calcbench released an operating lease report, ‘What Lies Beneath,’ an in-depth look at how the new accounting standard will impact corporate balance sheets.
With access to the vast amounts of granular data provided by XBRL filings to the SEC, Calcbench examined the details on leasing costs currently found in notes, to predict how this change will affect balance sheets at the end of the year.
Looking at lease liabilities for over 3,000 companies, the report digs into the data to track more than $1 trillion of leasing debt.
This is a great example of how large quantities of XBRL data can be analysed to predict how future financial scenarios will play out, useful for financiers, for policymakers and company management.
Read the report in full here.
