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Operating leases need to be on the balance sheet as lease assets or lease liabilities
le ase assets AND lease liabilities
A1 nailed it. That’s the core of it, here is a great illustration of the differences. https://www.mossadams.com/getmedia/bd25a65c-6ac3-4c16-a196-d99d2bb01132/moss-adams_lease-accounting-guide.pdf?ext=.pdf
Not really
Symmetrical accounting. Show investors / users of your FS the value of all leased assets and associated liabilities.
Remove some of the nonsense rules from 840 that made lease structuring a pain in the ass (but potentially lucrative) or added unnecessary complexity to things like sales-leaseback.
Scott Muir is a legend
ASC842 triggers embedded leases even with service contracts that has implied equipment. There is a decision tree in ASC 842 to make the determination whether that service contract is an embedded lease.
Without this provision, the service contracts get booked as expense recognized over the term of the contract.