New Lease Accounting Standards
Leases Move Onto Corporate Balance Sheets
According to the International Accounting Standards Board (IASB), listed companies are estimated to have around $3.3 trillion of leasing commitments, over 85 percent of which are off-balance sheet. Leasing obligations for a specific company can range from a few million dollars (on the low end) to tens of billions of dollars (on the high end). For example, Walgreens and AT&T each have over $30 billion in operating leasing obligations, while Hershey and Harley Davidson each have only a little more than $50 million in operating leases.
However, off-balance sheet leases will soon be a thing of the past. The Financial Accounting Standards Board (FASB), which governs the standards for US Generally Accepted Accounting Principles (GAAP), and the International Accounting Standards Board (IASB), which governs the International Financial Reporting Standards (IFRS), have introduced new lease accounting standards which will transfer these operating leases onto the balance sheet.
With the goal of providing greater market awareness for the new lease accounting standards, LeaseAccelerator has compiled a list of the 500 largest U.S. public companies ranked by the size of their off-balance sheet leasing obligations. To identify the 500 companies, we used Fortune Magazine’s most recent “Fortune 500” study. For the operating lease obligations, we collected data from the most recent SEC 10-K annual filings for each of these public companies. The data was collected in September 2015. As a result, for most companies the fiscal year 2014 reports were used.
Full transparency – LeaseAccelerator markets “Enterprise Lease Accounting” software, the primary benefit of which is helping companies comply with the new lease accounting standards. As a result, we benefit from greater awareness of the new standards.
The Top 20 Companies Most Impacted
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White Papers, Handbooks, and Research Studies
With the deadlines for the new lease accounting standards approaching quickly, many companies are asking how software can help automate the tasks required for the transition period. US GAAP filers adopting ASC 842 will be required to provide three years of comparative reporting.
Learn the differences between contract-level and asset-level lease accounting in this technical white paper. Review examples of the impact of asset-level decisions, judgments, and events for material handling, data center, and IT equipment.
Considering lease accounting software to comply with the new FASB or IFRS standards? Download this eBook to understand the potential time and cost savings opportunities resulting from automation of lease classification and financial reporting.