The Inclusion of Leases on the Balance Sheet as an Asset

question 92

True/False

The inclusion of leases on the balance sheet as an asset and liability has lowered firms' debt-to-asset ratios.
Generally, the impact is greater upon the smaller of the numerator or denominator. The numerator is smaller in the debt/asset ratio. By adding the same amount to both the top and bottom of the calculation, the numerator is magnified, leading to a greater number. The ratio increases.

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Definitions:

Ectoderm

The outermost layer of cells or tissue of an embryo in early development, giving rise to the skin and nervous system.

Lens

Transparent biconvex structure lying between the iris and the vitreous humor.

Mesoderm

The middle layer of an embryo in early development that gives rise to muscles, bones, and the circulatory system.

Autonomic Neurons

Nerve cells that control involuntary functions of the body, such as heart rate, digestion, and respiratory rate.