American Eagle Outfitters reported the following operating lease information in a footnote to the 2016 annual report (in thousands):

a. Calculate the liabilities potentially left off the balance sheet. Assume that the company's implicit discount rate on leases is 6% and round the remaining lease term to the nearest whole year.
b. American Eagle Outfitters' balance sheet reveals that the company has $1,782,660 thousand total assets and $578,091 thousand total liabilities. What proportion of assets and liabilities are on balance sheet versus off balance sheet?

Question

American Eagle Outfitters reported the following operating lease information in a footnote to the 2016 annual report (in thousands): 
  
a. Calculate the liabilities potentially left off the balance sheet. Assume that the company's implicit discount rate on leases is 6% and round the remaining lease term to the nearest whole year.
b. American Eagle Outfitters' balance sheet reveals that the company has $1,782,660 thousand total assets and $578,091 thousand total liabilities. What proportion of assets and liabilities are on balance sheet versus off balance sheet?

Quizplus · Accepted Answer

The Answer of American Eagle Outfitters reported the following operating lease information in a footnote to the 2016 annual report (in thousands): 
  
a. Calculate the liabilities potentially left off the balance sheet. Assume that the company's implicit discount rate on leases is 6% and round the remaining lease term to the nearest whole year.
b. American Eagle Outfitters' balance sheet reveals that the company has $1,782,660 thousand total assets and $578,091 thousand total liabilities. What proportion of assets and liabilities are on balance sheet versus off balance sheet?

American Eagle Outfitters Reported the Following Operating Lease Information in a Footnote