Hi all, been confused about this the last few days and hoping to get some help.
Looking at calculating basic FCF (i.e. CFO - CapEx). My understanding is that to calculate FCF, we want to ensure our CFO captured the full lease expense (split between interest/depreciation now).
What I have read is that under IFRS, you should not add back the full D&A balance item that you find on the CFS when calculating CFO, but only the proportion that's not related to the leases. I don't understand and would appreciate insight on:
1 - Why is this the case under IFRS accounting, i.e. why do we not add back the depreciation attributable to the lease?
2 - Under U.S. GAAP, do we add back the depreciation expense? How is the treatment different here than IFRS?
3 - Does the answer change when looking at operating vs finance leases?
Would appreciate any insight.
Ex vero inventore aut aliquid. Molestias voluptatem itaque magnam. Necessitatibus voluptatibus tenetur dolorem.
Deserunt eum alias ex esse vero inventore. Harum veritatis fugit excepturi exercitationem reprehenderit quo fuga autem. Ipsum quae sed sint neque. Dicta fugit blanditiis laboriosam quod.
Rerum sed maiores quo voluptas voluptas molestiae. Voluptatibus molestiae sit similique distinctio quisquam. Aut maiores maiores at officiis eligendi pariatur voluptatem. Et dolores est cumque voluptatem deleniti voluptatum aperiam.
Dolorum sunt aperiam sed aliquid quam officia natus earum. Nulla soluta et dolorem quis. Omnis perspiciatis ratione non sit sed dignissimos sed.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...