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The Analysis and Use of Financial Statements Summary: Chapter 11 CHAPTER 11: LEASES AND OFF-BALANCE-SHEET DEBT Because of the volatility of prices and cash flows, the risks of owning operating assets have also increased. These trends have driven firms to seek methods of: 1) Acquiring the rights to assets through methods other than traditional direct purchases (financed by debt). 2) Controlling the risks of operations through derivative and hedging transactions. “Executory contracts” are the primary alternative form of transactions used by firms to acquire operating capacity, supplies of raw materials, and other inputs. The emphasis on accounting assets and liabilities rather than the recognition of economic resources and obligations further encourages firms to keep resources and obligations off the balance sheet.
Approximate Word count = 440
Approximate Pages = 1.8
(250 words per page double spaced)
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