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Unformatted text preview: rbucks sign mainly operating or capital leases?
• Starbucks signs mainly operating leases. Starbucks’ rent expense
associated with operating leases is $714.7 million in 2009. Its total
capital lease obligation in 2009 is only $7.8 million.
2. Where does Starbucks disclose its operating leases on its balance sheet?
• Starbucks does NOT disclose its operating leases on its balance
sheet. Only capital leases are disclosed on the balance sheet.
Starbucks includes its capital lease assets in “Net, property, plant
and equipment” and its capital lease liabilities in two places: the
current portion is included in “Other accrued expenses” and the
long-term portion is included in “Other long-term liabilities.”
3. Assume a discount rate of 6 percent, and that the amount in the
“thereafter” row in Starbucks’ footnote disclosure is equally spread over
the years 2015 – 2019. What is the present value of Starbucks’ operating
leases at the end of fiscal 2009?
• The present value is $3,434.89...
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- Spring '12