The proposed lease accounting rules by FASB/IASB should not have a significant impact on healthcare industry lessees. Most of the lease transactions are generally for high-tech equipment such as CT scanners and MRIs with good residuals and favorable tax benefits so the resent values (capitalized amounts) are significantly less than cost. For doctor and dentist equipment lease financings the liberal tax write offs under section 179 favors CSA or dollar out transactions.
Hospitals tend to use FMV leases to acquire equipment and capitalized amounts should be low enough to keep lease offerings in demand. The traditional reasons for leasing (raising capital, low financing cost, fixed rates, level payments, tax benefits, managing equipment life cycles, transfer of residual risk, convenience ) will continue to exist. The off-balance sheet accounting reason for leasing will be released but not eliminated as long as the amount capitalized is less than the cost of the equipment. Dollar out leases will be treated the same as under current GAAP capital lease accounting- the lease will be capitalized at 100% of the asset’s price.