Off-Balance Sheet Accounting by Lessees and Current Proposals to End It
Edward P. McTague, Ellen Ambrose

Abstract
U.S. companies have been engaging in off-balance sheet financing for a few decades. Off-balance sheet items represent real and tangible assets; however, they end up buried in the footnotes and unaccounted for on the balance sheets utilized by potential investors and other financial statements’ users. This paper discusses current proposals to require lessees to put all operating leases on their balance sheets, with emphasis on the latest FASB/IASB joint proposal. The project, while likely to enlarge the companies’ balance sheets, will ultimately lead to more truthful and transparent financial reporting.

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