The Financial Accounting Standards Board (FASB) has issued its new lease accounting guidance, which requires all operating leases to be recorded on the balance sheet of lessees. The new standard is expected to be issued by year end, with an effective date of fiscal year 2019 for public business entities and 2020 for non-public business entities.
The standard, which culminates a project lasting nine years, will not only change how credit officers review the financial statements of their borrowers, it will add billions of dollars in assets and liabilities onto bank balance sheets and could have an impact on bank regulatory capital and leverage ratios.
Read the FASB In Focus newsletter on lease accounting.
Read FASB’s cost-benefit document.