FASB looking to expense leasing costs

Major companies could be affected by the change

AccountancyAge.com

US accounting standard setter, the Financial Accounting Standards Board, is considering forcing companies to include the cost of leased equipment and property on the balance sheet.

Currently these costs are not included on the debt side of the balance sheet with a company only required to detail its future lease obligations with a special footnote in the annual report.

The actual rent payments during any given quarter are deducted in the income statement for that period.

The new rule would have a major impact on the balance sheet of some of the world's biggest companies including drugstore giant Walgreen Co, and postal services group Federal Express, which have billions of dollars in leasing costs.