More than 80% of American companies lease equipment rather than purchasing it.
That’s a big number.
And the reason you should care about it is even more significant. When your equipment lease accounting compliance deadline rolls around, all of your equipment leases will have to be noted on your balance sheet.
In the past, this treatment was reserved for capital leases only.
But now the Financial Accounting Standards Board (FASB) and its sister governing boards have also decided operating leases - including equipment leases - should move out of the footnotes to join the party on the balance sheet.
But just what is an equipment lease according to the accounting governing boards?