For decades, anything that fell under the broad category of “operating leases” didn’t have to be reported on balance sheets. That explains why so many multinational corporations with seemingly strong financials suddenly imploded during the 2007 financial crisis. Since the crisis, though, the accounting industry has been working to make financial statements more transparent, and the effects of those efforts beginning to be felt.
Referred to as ASC 842, IFRS 16 and GASB 87, these new standards are designed to create a more level playing field across public, private and international accounting standards for reporting lease obligations. For entities that use leases and their accountants, these standards add complex new layers to both gathering and reporting lease information.
Read here for what you need to know.
