Only question 3 needed)
In conversations with employers, we find that the ability to clean, manage, and analyze data is a
skill that sets students apart as job candidates. This project provides the opportunity for you to
practice this skill using the data visualization tool – Tableau. This software allows the user to
transform data into pictures in order to gain a better understanding of the data. In addition, the
project should help you understand the broader picture of leases within the United States and
abroad while comparing the current lease accounting standard to the previous accounting standard.
The lease dataset (Tableau_Data) posted on Canvas includes data on imputed operating lease
amounts (Imputed Operating Lease Interest Expense, Imputed Operating Lease Depreciation,
Assets on Operating Lease – Gross, Assets on Operating Lease – Accumulated Depreciation, Debt
Equivalent Operating Leases); Current Portion of Capital Leases; Capital Leases; Assets under
Capital Lease – Gross; Financial Accounting Standard; and other firm-level information for a
broad group of publicly traded companies in the U.S. and other countries.
Students must work in groups randomly determined by Canvas. The deliverable for the project is
a memo of a maximum of 3 pages, single-spaced, 12-point font (supporting material such as
pictures, tables, and references should be contained in a maximum of 3 additional pages). The
memo should be focused on answering the questions listed below. The conclusions in the memo
should be supported with visualizations formed from using Tableau and any relevant external
1. What is off-balance sheet financing in the context of leases under the GAAP in effect prior
to ASU No. 2016-02? Compare the prevalence of off-balance sheet financing between
IFRS and US GAAP companies.
o Relying on the differences in the accounting for leases under ASC 842 versus IAS
17, explain the differences (if any) in the prevalence of off balance sheet financing
between the two standards (The supplement to the text beginning on page 897 is a
helpful starting point).
2. Use United Continental Holdings’ contractual obligations disclosure and any other 10-K
information to bring its “Aircraft operating lease obligations” on the balance sheet. That is,
capitalize the operating lease obligation using the disclosures.
o Clearly identify any assumptions you make and evaluate its reasonableness.
3. If a financial statement user can capitalize off-balance sheet operating lease assets and
liabilities using lease disclosures, why create a new standard mandating capitalization?
4. Select and compute relevant financial ratios with and without imputed operating lease
amounts and evaluate the impact of off balance sheet financing for stakeholders.
o Does off balance sheet financing make a material difference in the ratios?
o Which stakeholders might be affected by this difference?
5. Do you think companies will change their leasing decisions in response to this new
o How might their decisions (e.g., investing, operating, and financing) change?
o Will ASU No. 2016-02 eliminate off-balance sheet financing?