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Start preparing now for lease accounting changes

By Amy Thomas in Thought Leadership Posted December 26, 2016

New lease accounting rules approved earlier this year won’t become effective until after December 15, 2018 for public companies and December 15, 2019 for private companies, but businesses can start planning now so they are well prepared.

A new article by Jeff Taylor, assistant vice president and relationship manager for business banking in KeyBank’s Vancouver office, describes how the new rules will have a minimal impact on leasing.

The primary benefits of leasing will be unchanged under the new rules, Taylor writes in the Vancouver Business Journal. Leasing continues to provide a host of advantages, including conservation of cash, maintaining cash flow, providing tax benefits, maximizing flexibility, improving asset management and providing overall convenience.

The main change in the new standards will impact how operating leases are accounted for on corporate balance sheets. Instead of appearing as a table of future payments in the footnotes, they will appear on the balance sheet, as an asset and liability, but as a non-debt liability.

You can view an interactive graphic on the changes here. Or you can read the entire article here:

Read full article


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