The accounting overhaul that pulled leased airplanes and warehouses onto corporate balance sheets has led to higher ongoing expenses for companies than the US standard-setter initially expected, according to a new report.
Overall, the leases guidance achieves its goal of providing users of financial statements, like investors, more useful details about leasing activities, the Financial Accounting Standards Board found in a report issued Thursday evaluating the rollout of the 2016 standard.
FASB’s guidance requires companies to recognize on the balance sheet assets and liabilities for all leases they hold, including so-called “operating” leases—a massive shift for many businesses.