Among the four companies, which saw the biggest impacts from the adoption of ASC 842? Explain United Airlines "adopted the new lease accounting standard, ASC 842, using the modified retrospective approach"(SEC). As a result, it was necessary to recognize and measure all existing leases at the date of initial application (January 1, 2019) as if the new standard had been in effect since the beginning of the lease. Under this approach, United Airlines had to record lease liabilities and right-of-use assets for all leases and adjust opening balances of equity as of January 1, 2019. The company did not restate prior years' financial statements but instead provided additional disclosure to explain the new standard's impact on financial statements. Several significant changes to the company's financial statements were impacted by the adoption of ASC 842, especially the balance sheet. The most affected line items include total assets, total liabilities, and total shareholders' equity. The total assets were increased by $14.7 billion due to the recognition of right-of-use assets, while total liabilities were increased by $15.1 billion due to the recognition of lease liabilities. Total shareholders' equity was decreased by $0.4 billion due to the adjustment of opening balances. Furthermore, the income statement was affected by the recognition of additional depreciation and interest expense for the right-of-use assets, as well as other lease income for the leases that are being leased out. United Airlines Holdings, Inc. saw the biggest impact from the adoption of ASC 842. This is because the company had the largest lease portfolio among the four companies, which resulted in the recognition of the largest right-of-use assets of $14.7 billion, and the largest lease liabilities of $15.1 billion. Furthermore, the company also had the largest adjustment of opening balances of equity of $0.4 billion due to the adoption of the new standard. The ASC 840 was used in 2017's 10-k filings for Delta Air Lines, it changed to ASC 842 in 2018's 10-k filings. Because there's no information about operating lease liability being shown on the balance sheet in the year of 2017. In 2018, there is a separate lease position that clearly classified the capital and operating lease assets/liabilities. The line items on the financial statements that are affected the most by the adoption are total assets and total liabilities. Because the operating leases are also included in the balance sheet under ASC 842, which significantly affected the total assets and liability due to the addition of operating leases. For example, under 2018's balance sheet, there is an addition of operating lease ROU assets ($5994 million); current maturities of operating leases (955 million); and noncurrent operating leases ($5801 million). Southwest Airlines adopted the provisions of the New Lease Standard effective January 1, 2019, using the modified retrospective adoption method, utilizing the simplified transition option available in the New Lease Standard, which allows entities to continue to apply the legacy guidance in ASC 840, including its disclosure requirements, in the comparative periods presented in the year of adoption. The expected major impacts on the balance sheet were: the removal of $1.625 billion in Assets including $1.669 billion in constructed for others (less allowance for depreciation of $166 million), and 122 million in related assets. The addition of $1.354 billion in Assets including $1.466 billion in Operating lease right of use assets and $110 million of flight equipment leases reallocated into Operating lease right of use assets. The removal of $1.602 billion in construction obligations and the addition of 1.474 billion in operating lease liabilities. Other areas impacted to a lesser degree include prepaid expenses and other current assets, accounts payable, accrued liabilities, current maturities of long-term debt, long-term debt less current maturities, deferred income taxes, other noncurrent liabilities, and retained earnings. In 2017, American Airlines did not adopt the ASC 842, since there weren't any operating leases during that period thus making the adoption of the ASC 842 not needed. Because there was no financial impact of the lease agreement, there wasn't a need for ASC 842. But in 2018, there was a change in the balance sheet in which there was an operating lease intake, making American Airlines Adopt the ASC 842. Since American Airlines began to plan on expanding, thus wanting to create more assets, they've been able to lease up more assets for themselves to expand the business, causing the creation of their operating lease. The line items on the financial statements that are affected by his adoption would be Stockholders Equity by $9.556 Billion, Long- term debt by $9.556 Billion as well. It also affected the lines of Operating lease right-of-use assets by $9.151 Billion, which then altered the Total Assets, and then the usage of Operating Leases affect Current Liabilities by $1.654 Billion and noncurrent liabilities by $7.902 Billion. Among the four companies, the biggest impact of the implementation of ASC 842 would be American Airlines. United Airlines 10-K for the year ended December 31, 2019 United Airlines 10-K for the year ended December 31, 2018 Delta Air Lines 10-K for the year ended December 31, 2018. Delta Air Lines 10-K for the year ended December 31, 2017. Southwest Airlines 10-K for the year ended December 31, 2019. Southwest Airlines 10-K for the year ended December 31, 2018. 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