When a company leases a piece of equipment, it has two choices, either to report it on the Balance Sheet (capital lease) or not to report on Balance Sheet if it is an Operating Lease. The  International Accounting Standards Board (IASB) and America’s Financial Accounting Standards Board (FASB) say a lease is like incurring debt and hence should be on your balance-sheet. This new rule, proposed last week by the two regulators is up for public comment until December, but could be enacted as soon as June.
Per the new rule all leases will be put on the Balance Sheet, the right to use the leased item in the assets column and the associated obligation to pay for it would go in the liability column. This would add to the debt of these companies, leading to an increase on the average interest bearing debt and hence the interest on the Income Statement.
But on the other hand, since no rent will be paid of the asset, the operating earnings would be so much higher. But many companies are close to their maximum debt limits, and the new rules could push them over the edge. The effect of the change will vary depending on the type of industry the company is, for industries like retail and airlines which lease most of their property and airplanes respectively, it will not be a bigger effect.
With the state of the economy, this effect will be felt even more so. So if we see the Airline travel getting more expensive we know who to blame this time!