The initial impetus for lease capitalization was caused by concern over lessee balance sheets.

Question

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Lease capitalization was implemented as a way to address concerns over lessee balance sheets, particularly in terms of accuracy and transparency. Prior to lease capitalization, certain lease obligations could be kept off-balance sheet, which made it difficult for investors and creditors to get a complete picture of a company's financial standing.

The Initial Impetus for Lease Capitalization Was Caused by Concern