Operational Lease discount rate discount, remember, reading, balance, always

dvilayphet

I seem to remember reading somewhere that we don't always use the stated lease rate when adding an operational lease back to the balance sheet, at times we use the WACC, or the higher of the two?....I can't seem to find this info, does anyone remember this?

flyinggirl

its the lower of the implicit rate or the stated rate should be used when capitalising operating leases (get the implicit from looking at the PV of the finance leases already on the balance sheet -then use this rate to find the NPV of the operating leases you are capitalising)