For any business that leases property, furniture, equipment, etc. this is IMPORTANT! The FASB (Financial Accounting Standards Board) is proposing changes to leases that will affect your balance sheets.
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Currently, a business puts a note in their financial statement that shows the next 12 months of lease payments coming due. With the proposed changes, the business will need to capitalize the lease payments - in other words, show the liability. It will affect current ratios and could impact your bank covenants, so please take a look at these proposed changes and consult your CFO, Accountant or tax advisor.
Note that we rent art and a true rental is not affected by these changes. If you'd like more information on what constitutes a true rental versus a lease, send me an email: email@example.com
Legal: We are not tax advisers or accountants and are providing this link and these details for informational purposes only!