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As lease rules advance, companies need to alert investors

Tammy Whitehouse | May 8, 2018

Public companies still have several months before they are required to show their lease obligations on the balance sheet, but they should be prepared over the next few quarters to give investors increasing detail about the change that is coming.

Companies are required under Staff Accounting Bulletin No. 74, now codified under Topic 11-M, to give investors some advance warning about accounting standards that will become effective in future periods. The idea is to let investors know how the financial statements will change when they are prepared under new accounting requirements in future periods.

“It helps investors get a sense of the accounting changes that will be coming,” said Wes Bricker, chief accountant at the Securities and Exchange Commission, at a recent regional conference of the Institute of Management Accountants. “So investors have time to anticipate and build that into their evaluations....

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