10 Land Mines From New FASB Rule For Off-Balance Sheet Debt

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Off-balance sheet operating leases as a substitute for debt has been an issue since the SEC asked the FASB to update the rules over a decade ago. Our models have always made the adjustment to put off-balance sheet debt back on the balance sheet to get a better sense of a company’s obligations and to hold management accountable for the capital used in the business.

For investors who haven’t been following this issue, however, the new rules may come as quite a shock once they’re enacted in 2018. In this special report, we identify the 10 companies that will be most affected by the new rules. The impact for some companies will be more than 10 times their entire market cap

Get this special report, “10 Off Balance Sheet Debt Land Mines” for only $9.99. 

*This report is free to all Professional & Institutional members.

Photo Credit: Dan Simpson (Flickr)

1 Comment

  • John

    November 18, 2015

    This is a great article a couple of years ahead of its time, when the street research will start to sound the warning bells.

    Investors that don’t take into account the inherent value of operating leases in invested capital overestimate their return calculations.

    If managements didn’t want to obfuscate their invested capital, then they should have no issues about simply placing the PV of their operating lease obligations on the balance sheet. Why not make it easier for owners?

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