New transparency for lease obligations to be introduced in 2019
The newly released lease accounting standard brings transparency to lease obligations, bringing all leases onto the balance sheet.
After three decades, investors will now enjoy reliable information about leasing obligations, with less need for “rules of thumb” and guesses about the impact of lease obligations on a lessee’s debt gearing/leverage. The change will be effective 1 January 2019. Up to now, accounting has not been fully reflecting the economics of leasing transactions with analysts routinely making adjustments for operating leases.