Question

Which new lease accounting rule was implemented in the US in 2019?

A. Leases with a lease term greater than 1 year will be reported off-balance sheet.
B. All leases, regardless of their term, will be reported on the balance sheet.
C. Only short-term leases with a duration of fewer than 6 months will be reported on the balance sheet.
D. Leases will no longer be disclosed in financial statements.

Answer 1

The new lease accounting rule implemented in the US in 2019 is that all leases, regardless of their term, will be reported on the balance sheet. Option B

Step-by-step explanation:

Prior to 2019, leases were classified as either operating leases or capital leases. Operating leases were not required to be reported on the balance sheet, while capital leases were. However, under the new lease accounting rule, known as ASC 842, all leases must now be reported on the balance sheet.

This change was made to improve transparency and provide a more accurate representation of a company's liabilities and financial position.The correct answer is B. All leases, regardless of their term, will be reported on the balance sheet.