Fixing Business “Boo-Boos” Part 2

May 23, 2017 by Mark Battersby

Although the Federal Reserve’s Small Business Credit Survey Report on Employer Firms ranked government regulations—including ObamaCare—as more problematic than credit availability, cash flow, taxes or the cost of running a business, it is often correcting the so-called “boo boos” encountered in daily business dealings that generate the most (often long-term) savings. Consider the lease/buy conundrum so familiar to many mobile entertainers.

The lease accounting rules as we currently know them are changing. The U.S. Financial Accounting Standards Board (FASB), which writes the rules in the U.S., has come up with new guidelines that will require many businesses to add all but the shortest leases to their balance sheets as liabilities, much like debt.

Although the newly announced guidelines will not officially kick-in for a couple of years, imagine the impact on the mobile entertainment business when a supplier, lender or even a potential buyer expects to see leases reflected on the operation’s financial statements. The many DJs, VJs and KJs that currently have borrowing limits and/or restrictions placed on them by lenders and investors could, once leases must be included on the mobile entertainment operation’s balance sheet, be in violation of those agreements.

Read the rest of this article and check out the full issue at http://www.mobilebeat.com/emagscurrent/180

Mark Battersby Mark Battersby (5 Posts)


Filed Under: 2017, Business