Lease Capitalization - Impacts Your Borrowers' Leverage

Lease Capitalization Impacts Your Borrowers' Leverage Liquidity Profitability & Repayment Ability

Thursday, October 6, 2022
2:00 – 3:00 pm (Eastern Time)

Generally accepted accounting principles (GAAP) do not change often, but when they do, bankers need to understand how changes in GAAP effects their borrower's ability to repay.  GAAP is requires that companies capitalize their leases, and that will worsen their leverage, reduce their liquidity, and lower their profitability.

This bank webinar will explain why and when lease capitalization will be implemented and show how capitalizing both operating leases and financing leases will impact the financial condition and performance of borrowers.

Key learning objectives include:

  • Learn the key elements of the lease capitalization GAAP
  • Explain how lease capitalization will put both the lease liability and the right-of-use asset on the borrower’s balance sheet
  • Offer guidance on what items of financial condition and performance will be most impacted and tips on how to underwrite borrowers under the new GAAP

Specific topics covered in the webinar include:

  • Lease capitalization
    • Implementation date
    • Elements of capitalization—capitalization rate, amortization, right-of-use asset, lease liability
    • Operating leases and financing leases
  • Analysis and underwriting
    • Ratio covenants most sensitive—leverage ratio, current ratio
    • Lease cap’s impact on liquidity, leverage, solvency, and profitability
  • Portfolio management
    • Identification of industries and borrowers most sensitive to lease cap
    • Review and restructuring as needed of loans with financial covenants affected by lease cap

Instructor

Dev Strischek
Devon Risk Advisory Group / Principal
As the Principal for Devon Risk Advisory Group, Dev Strischek brings years of senior experience in financial services to his clients around the areas of risk policy, risk culture, and portfolio risk management. Dev also serves as a Member of the Private Company Council for FASB. Prior to those roles, Dev served for 18 years at SunTrust Bank, retiring as their Sr Vice President and Senior Credit Policy Officer for the bank. Dev is a frequent industry speaker on many aspects associated with credit risk and compliance, as well as loan policy best practices. He has also authored many industry trade articles on principles and practices, problems and issues relevant to risks that financial organizations must manage.
 

Attendance verification for CE credits provided upon request.

Webinar Sponsored by BankersHUB

If you are having issues with registering online, please contact CBAO's Education, Training & Special Event Coordinator, Malia Widder, (614) 610-1877.

 Registration (Member/Non-Member Pricing)

Webinar and Playback* ($295/$445)
*Playback has no expiration. 

Additional Hookup - Registering another banker from a different location ($185/$225)

 
When
10/6/2022
Sign in or create an account to register Last day to register is 4/6/2023