Lease-accounting change could increase short-term leases

05/22/2013 | Bloomberg Businessweek · Reuters

The latest lease-accounting proposal could lead companies to structure shorter-term leases to avoid placing them on the balance sheet, as the standard would require, according to Fitch Ratings. This would hamper the ability of lessors to predict cash flow and in general be a "credit negative" for them, analyst John Boulton wrote in a report. Fitch says arrangements assessed as "service contracts" would be able to stay off the balance sheet.

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Bloomberg Businessweek · Reuters