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Accounting & Reporting

Lease Accounting

Also called: IFRS 16, ASC 842, operating lease, finance lease

Modern lease accounting puts nearly all leases on the balance sheet as a right-of-use asset and a matching liability, ending decades of retailers and airlines carrying enormous rent obligations off it. The change moved rent expense into depreciation and interest, which mechanically raised reported EBITDA and leverage at the same time — so comparisons across the transition date need care.

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