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Prior to the 2016 lease standards, companies were able to structure a significant number of leases in order to keep them off the balance sheet.

Prior to the 2016 lease standards, companies were able to structure a significant number of leases in order to keep them off the balance sheet. They did not report the assets and liabilities on the balance sheet; instead, they recorded rent expense each period, without any impact on assets or liabilities. Discuss financial statement effects of the 2016 standards requirement that lessees record the lease asset and liability on the balance sheet for almost all lease transactions.

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