Spike in 2019Q1 Leverage Ratios: The Impact of Operating Leases
Posted: 19 Dec 2019
Date Written: December 13, 2019
Abstract
In this note, we show that the key driver of the 2019:Q1 increase in the leverage ratio appears to be a change in accounting rules – which requires the inclusion of operating leases as financial liabilities on U.S. corporations' balance sheets – and also provide a methodology for adjusting the leverage ratio to allow for cleaner historical comparisons.
Suggested Citation: Suggested Citation
Palazzo, Berardino and Yang, Jie, Spike in 2019Q1 Leverage Ratios: The Impact of Operating Leases (December 13, 2019). FEDS Notes No. 2019-12-13-2 https://doi.org/10.17016/2380-7172.2464, Available at SSRN: https://ssrn.com/abstract=3595653
Berardino Palazzo (Contact Author)
Board of Governors of the Federal Reserve System ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States
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