The change in the balance sheet would be an asset account called right-to-use. On the liability side of the balance sheet you would have a corresponding liability account for future lease payments or lease obligations. The proposal would discontinue the benefits of an operating lease and force most lessees to include leases in their balance sheet. (FASB, 2010)DateAccounts:Dr.Cr.13-MayLeased Obligation$9,100,000Right-of-Use Asset$9,100,000The effect of this change would benefit would be investors because they would be able to know what lease obligation the company has and the yearly payments associated to outstanding leases. People that have already invested into the company would be affected negatively by the increase in liabilities, which in the example problem the company would have to front load the liabilities of lease according to the proposed rule changes. (Purcell, September) Works CitedPurcell, B. P. (September, 2012 27). Balance sheets beware. Retrieved May 5, 2013, from Idaho Business Review: http://idahobusinessreview.com/2012/09/27/balance-sheets-beware-lease-accounting-standard-changes-to-show-more-liabilities/Harding, S., & Grimando, L. (2010, September 30). How Proposed Changes To IFRS and U.S. Lease Accounting Requirements Are Likely To Affect Standard & Poor's Credit Analysis [Electronic version]. RatingsDirect on the Global Credit Portal, 1-10.FASB. (2010). Exposure Draft .,(pp. 6-8).
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