Question
Prior to the most recent FASB leasing standards, companies recorded operating leases by simply recording monthly lease payments as expenses. No right of use assets
Prior to the most recent FASB leasing standards, companies recorded operating leases by simply recording monthly lease payments as expenses. No right of use assets were recorded, and there was no associated liability. Generally net income was similar, but under the new rules amortization of the asset and interest on the liability are recognized. What did the change in the FASB rule to requiring recognition of right of use liabilities and assets increase, decrease, or leave unchanged each of the following ratios for airlines like these two? Explain your answers:
- Asset turnover
- Return on assets
- Capital structure leverage
- Debt to equity ratio
- Current ratio
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