The Financial Accounting Standards Board (FASB) recently approved new standards that will greatly impact the books of construction companies and other heavy users of equipment. MWE Partner Michael McVetty offered his insight about the changes and their possible impact in a recent Long Island Business News article.
“The international community looks at it as, debt is debt is debt – it belongs on your balance sheet. The U.S. is trying to mirror more of an international standard. If you have a five- or 10-year lease for office space, that didn’t go on your balance sheet before. But now you have to put a significant liability on your books, and an intangible asset – the right to use the space gets amortized. The one positive is your EBITDA [earnings before interest, taxes, depreciation and amortization] is going to improve, but you’re going to have a significant amount of debt.” *Read More >>
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