Analyzing, Interpreting, and Capitalizing Operating Lease

Goldman Sachs' SEC filing for the quarter ended March 31, 2019, report contains the following lease footnote.

Leases (ASC 842). In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ASU requires that, for leases longer than one year, a lessee recognize in the statements of financial condition a right-of-use asset and a lease liability. It also requires that for finance leases, a lessee recognizes interest expense on the lease liability, separately from the amortization of the right-of-use asset in the statements of earnings, while for operating leases, such amounts should be recognized as a combined expense. The firm adopted this ASU in January 2019 under a modified retrospective approach.

The table below presents information about future operating lease payments:

the remainder of 2019 318

2020 341

2021 262

2022 235

2023 204

2024 193

2025 -thereafter 2494

Total undiscounted lease payments 4047

Imputed interest - 1634

TOTAL OPERATING LEASE LIABILITIES: 2413

Remaining life = 18 years

Aver.discounted rate = 4.85%

Goldman Sachs' 10-K report for the year ended December 31, 2018, included the following table about future cash payments required under operating leases.

Dec.2018

2019 281

2020 271

2021 218

2022 177

2023 142

2024 - thereafter 1310

TOTAL 2399

Question1:

Use an Excel spreadsheet and the information on future operating lease payments to verify the total liabilities of $2,413 million on the 2019 Form 10-Q. Hint: The amount will not be exactly $2,413.

Enter the amount computed in Excel. Round your final answer to the nearest million.

Question 2:

Use the information on rental payments from the December 2018 Form 10-K, to calculate the present value of future payments at year-end. Use the same average weighted lease term and discount rate Goldman Sachs discloses in the 2019 Form 10-Q.

Enter the amount computed in Excel. Round your final answer to the nearest million.

million