A New Trend for Performance Metrics? Image

A New Trend for Performance Metrics?

June 17, 2019

Curated Content

In the aftermath of lease accounting standards ASC 842 and IFRS 16, public companies are now evaluating the impact of these changes on the calculation of common business performance metrics.  Some international companies are choosing to amend how they measure performance to account for these changes to clarify and qualify the information being presented.  Will this be the trend for all companies going forward?

With 2019 being the first year under the new standard for public entities, understanding how lease accounting impacts performance metric calculations is integral in comparing pre- and post-lease accounting metrics. Due to the lag in private company lease accounting compliance dates, adjustments may also be needed when evaluating public versus privately owned companies.  Long-term, understanding how the metrics are calculated will ensure that a fair comparison is being made from company to company and from reporting period to reporting period.

One large question remains.  Will all companies modify how they calculate their metrics so that there is consistency for investors, lenders and others when comparing company performance?  If yes, investors and others who rely on these metrics will be performing evaluations on an even playing field.  If not, additional research and understanding may be needed to ensure comparisons are fair and balanced.

Read the rest of the article on WSJ.

View More articles

Contact Scribcor

We’re always happy to talk lease management. If you’d like more information about our services, or have a question, or just need some helpful advice on how to get started, just send us a note and we’ll get right back to you. There’s never any pressure or obligation and your contact information is kept confidential.

"*" indicates required fields

Service(s) interested in:
This field is for validation purposes and should be left unchanged.