The new Accounting Standards Codification (ASC) 842, became effective 2023 calendar year, requires all leases to be recognized on the balance sheet. The new standard affects the reporting for operating leases of 12 or more months the same way capital leases has been reported in the past The reasoning behind this is transparency. Which in my opinion is a good thing for investors to have better view of financials when investing. Some smaller companies worry about having to spend more money due to the fact they do not have the capabilities or software to needed for the new accounting standards