Why has accounting for leases been controversial?
A) Leasing is uncommon.
B) Companies have structured leases in a way that the lease liabilities remain "off-balance sheet".
C) All leases are structured the same way and treated the same way.
D) Most leases are immaterial.

Question

Quizplus · Accepted Answer

Accounting for leases has been controversial because companies have often structured leases in a way that the lease liabilities remain "off-balance sheet," which can misrepresent a company's financial health and make it difficult for investors to assess potential risks.

Why Has Accounting for Leases Been Controversial