E10-31. Analyzing, Interpreting and Capitalizing Operating Leases LO1 YUM! Brands Inc. reports the following footnote relating to its capital and operating leases in its 2015 10-K report ($ millions). YUMI BRANDS INC. (YUM) Future minimum commitments . . . under noncancelable leases are set forth below. At December 26, 2015, the present value of minimum payments under capital leases was $169 million. MBC Commitments ($ millions) Capital Operating 2016 . . $ 20 $ 672 2017 . . 20 620 2018 20 569 2019 20 516 2020 19 457 Thereafter . . . 188 2,123 $287 $4,957 a.Confirm that the implicit rate on YUM!'s capital leases is 7.634%. Using a 7.634% discount rate, compute the present value of YUM!'s operating leases and rounding the remaining lease life to three decimal Plasis Rascribs the adjustments we might consider to YUM!'s balance sheet and income b. YUM! reported total liabilities of $7,100 million for 2015. Would the adjustment from part a make a substantial difference to YUM!'s total liabilities? Explain