Session 5: Financial Reporting and Analysis: Inventories and Long-lived Assets
Reading 22: Long-lived Assets: Implications for Financial Statements and Ratios
LOS e: Discuss the implications for financial statements and ratios of leasing assets instead of purchasing assets.
The lessee has an incentive to classify a lease as an operating lease, rather than as a finance lease, because an operating lease:
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A) |
has no risk involved because the lessor assumes all risk. | |
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B) |
does not appear on the balance sheet. | |
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C) |
has payments that are less than a capital lease's payments. | |
Having less assets and liabilities on the balance sheet than would exist if the asset were purchased increases profitability ratios (e.g., return on assets) and decreases leverage ratios (e.g., the debt to equity ratio). | 
发表于 2011-3-7 15:51
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