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leveraged |
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FASB has issued a staff position that requires companies to recalculate their leveraged leases if there is a change in the timing of cash flows relating to income taxes generated by the leveraged lease. Specifically, firms requiring investment funds, but lacking funds from operations (proxied by profitability), and not having further access to discretionary pension funds, as evidenced by the underfunded status for the more highly leveraged firm, rely upon increased external debt, particularly when the firm has committed itself to high dividend payout levels. Leveraged leases can be a complex and intricate vehicle for financing equipment in today's marketplace. |
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