Many businesses use operating leases as a method to finance their operating assets. One of the frequently
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Many businesses use operating leases as a method to finance their operating assets. One of the frequently stated reasons for the popularity of operating leases (as opposed to capital leases) is that operating leases are carried off-balance-sheet—that is, operating leases are a form of off-balance-sheet financing. Discuss whether you think the capital market is “efficient” with respect to operating leases. Stated alternatively, discuss whether you believe that the capital market treats operating leases as off-balance-sheet debt or as on-balance-sheet debt. Be prepared to justify your answer.
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Financial Accounting For Executives And MBAs
ISBN: 9781618531988
4th Edition
Authors: Wallace, Simko, Ferris
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