Industry Insights

Private Equity & the New Leases Standard

November 2016

Executive Summary

The new leases accounting standard requires lessees to recognize virtually all leases on the balance sheet. Because of this, the way a private equity firm approaches its investments may change. Accounting Standards Update (ASU) 2016-02, Leases, requires lessees to record a liability for payment obligations under the lease and a corresponding right of use (ROU) asset for the right to use the leased asset during the lease term.

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