Lease Accounting Impact to BS and Value
Not sure if this is the right forum to post but thought it could work - there are new rules that allow you to move a lease off balance sheet, which makes your leverage ratio look better.
Why would this necessarily benefit a company? At the end of the day, if you can take on more leverage, wont an investor still judge you on your ability to produce cash flow? And, if you're a lender, although the balance sheet looks better, aren't there other metrics that would still drill down to the corp's ability to pay debt, which comes down to cash flow anyway?
I'm trying to understand how this truly creates value for a company. Thoughts?
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