Question
In Hoenns FY 2018 annual report, the company disclosed the following information about its operating lease commitments (in millions) within N Year FY 2018 FY
In Hoenns FY 2018 annual report, the company disclosed the following information about its operating lease commitments (in millions)
within N Year | FY 2018 | FY 2017 |
1 | 6,534 | 6,241 |
2 | 5,489 | 5,225 |
3 | 4,039 | 3,957 |
4 | 3,350 | 3,247 |
5 | 2,789 | 2,574 |
6+ | 7,089 | 6,232 |
Hoenns operating lease expense in 2018 is $6,800 million. Assume that Hoenn records its finance lease liabilities at an interest rate of 4 percent.
Requirement: What is the additional amount of depreciation expenses would Hoenn recognize in its 2018 annual report if all operating leases are capitalized? Please show sufficient details of your calculations, including brief explanations when necessary.
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