The impact of lease accounting standards on airlines with operating leases: Implications for benchmarking and financial analysis
Document Type
Article
Publication Date
2018
Abstract
In 2016, the Financial Accounting Standards Board (FASB) has issued a new standard for lease accounting. The standard requires capitalization by lessees of most leases currently treated as rentals, i.e., those currently classified as operating leases under the existing standard for lease accounting. We examine the impact on airlines that currently make use of operating leases. Several key financial ratios are examined before capitalization and then after capitalization on a pro forma basis. The results indicate that working capital, leverage, and solvency change dramatically in a negative direction, and airline rankings based on those ratios also change, which has implications for benchmarking performance.
Publication Title
Journal of Transportation Management
Repository Citation
Caster, Paul and Scheraga, Carl A., "The impact of lease accounting standards on airlines with operating leases: Implications for benchmarking and financial analysis" (2018). Business Faculty Publications. 228.
https://digitalcommons.fairfield.edu/business-facultypubs/228
Published Citation
Caster, Paul, Scheraga, Carl A., and Olynick, Michael J. (2018). The impact of lease accounting standards on airlines with operating leases: Implications for benchmarking and financial analysis. Journal of Transportation Management, 28(1), 15-23. doi: 10.22237/jotm/1530403380
DOI
10.22237/jotm/1530403380
Comments
Copyright 2018 Journal of Transportation Management
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