Spike in 2019Q1 Leverage Ratios: The Impact of Operating Leases

Berardino Palazzo and Jie Yang
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Jie Yang: https://www.federalreserve.gov/econres/jie-yang.htm

No 2019-12-13-2, FEDS Notes from Board of Governors of the Federal Reserve System (U.S.)

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.

Date: 2019-12-13
New Economics Papers: this item is included in nep-acc, nep-gen, nep-ore and nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfn:2019-12-13-2

DOI: 10.17016/2380-7172.2464

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