In this installment of Accounting Matters, we examine possible impacts of the Financial Accounting Standards Board's Proposed Accounting Standards Updates for Leases. In the circumstance of a previous accounting alterations (FIN 48), we investigate how these changes will affect businesses' accounting selections, investment selections, debt covenant requirements, and evaluation of other key financial data. Changes in accounting standards may have important indirect economic effect on companies as they limit to access capital can instigate debt covenant violations, and distort key fiscal information that is used by the investors and the lenders.
New standards of accounting might affect the calculations of employee bonuses and also incentives that utilize EBITDA or operating income as benchmarks. We comprise recommendations for supervisors and identify particular debt covenant elements that could limit the negative impacts of the change that is proposed to rent accounting.
PUBLICATION DATE: November 15, 2014 PRODUCT #: BH642-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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