To Calculate the Estimated Impact of Proposed Lease Accounting Rules on
Your Company’s Financial Statements:
1. Identify the future operating lease obligations:
The future operating lease obligations are disclosed in a table in the Notes to
Consolidated Financial Statements in the company’s Annual Report.
2. Calculation:
Please double click on the spreadsheet below, input the future operating lease
obligations (years 1-5 and “thereafter”) and a discount rate in the shaded gray
area (round to millions), and hit the ESC button on your keyboard several times
to display the results. Call Bill Bosco at 914-522-3233 for trouble shooting
issues. The calculation discounts the reported rents using the input discount
rate. Rents in the thereafter bucket are spread over the number of years derived
by dividing the year 5 rent amount into the thereafter rent amount.
The comparative financial information shows the assets and liabilities added to
the balance sheet and the new pattern of lease expense that result from the
proposed rules under development by the FASB. The yellow shaded area shows
the front end cost effect of the proposed new lease accounting rules. Rather
than SL rent expense, the proposed rules will require that you calculate imputed
depreciation and interest expense on the capitalized asset and liability. This new
pattern will typically cause the additional burden of deferred tax accounting for
book/tax differences resulting from the front ended pattern of expenses.
Input:
YEARS
Future op lease pmts
Discount rate
1
2
3
4
5
$1,843
$1,961
$1,960
$1,929
$1,890
thereafter
$23,883
7.00%
Comparative Financial Information
Assets
Years
Liabilties
P&L
P&L B/(W)
CUR GAAP PROP GAAP CUR GAAP PROP GAAP CUR GAAP PROP GAAP
$
%
1
$0
$18,802
$0
$18,802
$1,843
$2,306
($463)
-25%
2
$0
$17,812
$0
$18,275
$1,961
$2,379
($418)
-21%
3
$0
$16,713
$0
$17,593
$1,960
$2,330
($370)
-19%
4
$0
$15,614
$0
$16,865
$1,929
$2,252
($323)
-17%
5
$0
$14,542
$0
$16,116
$1,890
$2,167
($277)
-15%
6
$0
$13,503
$0
$15,354
$1,837
$2,114
($276)
-15%
7
$0
$12,465
$0
$14,592
$1,837
$2,060
($223)
-12%
8
$0
$11,426
$0
$13,776
$1,837
$2,003
($166)
-9%
9
$0
$10,387
$0
$12,903
$1,837
$1,942
($105)
-6%
10
$0
$9,348
$0
$11,969
$1,837
$1,877
($39)
-2%
11
$0
$8,310
$0
$10,970
$1,837
$1,807
$31
2%
12
$0
$7,271
$0
$9,901
$1,837
$1,732
$105
6%
13
$0
$6,232
$0
$8,757
$1,837
$1,652
$185
10%
14
$0
$5,194
$0
$7,533
$1,837
$1,566
$271
15%
15
$0
$4,155
$0
$6,223
$1,837
$1,474
$363
20%
Totals
$27,955
$29,660