Investors might want to give those new lease accounting disclosures and balance sheet figures a second look as the dust settles on the first quarter earnings season.
New rules for how companies account for leased assets and obligations will permanently alter balance sheets—reflecting nearly $4 trillion worth of leases for planes, rail cars, storefronts, and restaurants worldwide. But the new liabilities will also distort ratios like debt-to-equity and return on assets that investors use to compare company performance over time and against competitors.
“There’s a ton of analytical consideration for investors in looking at the balance sheet, looking at the...