Financial Leasing Memorandum

Financial Leasing Memorandum

Financial Leasing Memorandum

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Assume the company you work for is privately held and desires to go public in the next few years. To prepare for the initial public offering (IPO), the CFO knows that the company will have to change how it reports and discloses leases in order to comply with §842 of the FASB Codification. You are tasked with writing a memo to the CFO that summarizes the leasing issues you have learned from examining the Form 10-K. For this assignment, provide a 500-700-word summary and analysis that addresses the following items:

1. Review the balance sheet of the company to determine if financing leases are presented on the report.
2. Navigate to the notes to the financial statements and locate the company’s note on leases. Explain the details of the leasing transactions, financing and/or operating, based on the amounts and disclosures found in the financial statements and the notes to the financial statements. Financial Leasing Memorandum
3. How do the financing or operating leasing arrangements impact the overall profitability and debt position of the company? Sometimes ratio calculations help to find trends. Consider: debt to assets, times interest earned, vertical and horizontal analyses.
4. What information did the company provide about its leases in the notes? Why is that information important?
5. How does each company comply with the rules as provided in the FASB Codification?
6. Summarize the key points the CFO needs to know about lease disclosures to prepare the company to comply with 842.

You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes.

Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages.

Likewise, large type, large margins, large indentations, triple-spacing, increased leading (space between lines), increased kerning (space between letters), and any other such attempts at “padding” to increase the length of a paper are unacceptable, wasteful of trees, and will not fool your professor.

The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument.