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The Balance of Probabilities
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Are you ready for the impact?
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The Balance of Probabilities - - PowerPoint PPT Presentation
The Balance of Probabilities - - PowerPoint PPT Presentation
The Balance of Probabilities
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How prepared are you for the global lease accounting changes?
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Agenda
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Who owns the plane?
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Convergence
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Timeline of events
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What will be effected?
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What will the new expense look like?
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P&L treatment
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Balance sheet treatment
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Year 0 – Current $m Current Assets 16,000 Non-current Assets 18,000 Lease assets — Total assets 34,000 Current Liabilities (12,000) Current lease liability — Non-current liabilities (4,000) Non-current Lease liability — Total liabilities (16,000) Shareholders Equity 18,000 Year 0 – New $m 16,000 18,000 10,942 44,942 (12,000) (1,400) (4,000) (9,542) (26,942) 18,000 Existing leases Proposed leases Liabilities /Equity .89 1.5 Debt/Equity .22 .75 Liabilities /NCA .89 1.5 Current ratio 1.3 1.19
What will the new balance sheet look like?
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Lessor treatment
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The difficulty with forecasting
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Preparing for the change
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Anticipated behavioral shifts
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Questions
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