Lease liabilities
Also known as: lease obligations
Lease liabilities are what a company owes under its leases for offices, stores, data centers, equipment and similar assets: the of the lease payments it has committed to make. Since accounting rules changed in 2019, most leases appear on the , with the right to use the leased asset on the asset side and the obligation to pay recorded here.
Like debt, they split into a current portion, the payments due within twelve months, and a non-current portion due later. Data sites often show these on separate lines, such as current portion of lease obligations and capital leases.
Accounting rules separate two kinds of lease. Finance leases, called capital leases under the older US rules, work much like buying the asset with borrowed money. Operating leases are closer to renting. Both now create a liability, but analysts and data sites do not always treat them the same way: some include all lease liabilities in , others leave operating leases out. Some data sites also keep the old label capital leases for a line that holds all non-current lease liabilities, operating leases included.
When comparing how much companies owe, check whether lease liabilities are included, especially for retailers, airlines and other businesses that lease much of what they use.