Lease Capitalization - How Lease Capitalization Impacts Borrower Leverage, Liquidity, Profitability, and Repayment Ability
  • CODE : DEVS-0047
  • Duration : 60 Minutes
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A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Dev is principal of Devon Risk Advisory Group and engages in consulting, speaking and training on a wide range of risk, credit, and lending topics. As former SVP and senior credit policy officer at SunTrust Bank, Atlanta, he was responsible for developing, implementing, and administering credit policies for SunTrust's wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management. He also spent three years as managing director and credit approver in SunTrust's Florida commercial lending and corporate investment banking areas, respectively. Prior to SunTrust, Dev was chief credit officer for Barnett Bank's Palm Beach market. Besides stints at other banks in Florida, Kansas City, and Ohio, Dev's experiences outside of banking include CFO of a Honolulu construction company, combat engineer officer in the U.S. Army, and college economics instructor in Hawaii, Missouri, and Florida. A graduate of Ohio State University and the ABA Stonier Graduate School of Banking, he earned his M.B.A. from the University of Hawaii.

Dev serves as an instructor in the Stonier Graduate School of Banking, the Southwestern Graduate School of Banking, and the American Bankers Association's (ABA) Commercial Lending. His school, conference, and workshop audiences have included participants drawn from the ABA, RMA, OCC, Federal Reserve, FDIC, FFIEC, SBA, the Institute of Management Accountants (IMA) and the AICPA.

Dev has written about credit risk management, financial analysis and related subjects for the Risk Management Association's RMA Journal, and other business professional journals. He is the author of Analyzing Construction Contractors and its related RMA workshop. A past national chair of RMA and former Florida Chapter president, Dev serves as a member of the RMA Journal's advisory board, and he also serves on the advisory board of the Atlanta Chapter of the Professional Risk Managers' International Association (PRMIA), and he has consulted on credit risk issues with banks in Morocco, Egypt, and Angola through the US State Department's Financial Service Volunteer Corps (FSVC).  He also served on the Private Company Council (PCC) of the Financial Accounting Standards Board (FASB);  the PCC reviews current and proposed generally accepted principles (GAAP) and recommends revisions that simplify their use for privately held organizations.



Generally accepted accounting principles (GAAP) do not change often, but when they do, we need to understand how changes in GAAP effects  borrowers’ and clients’ ability to repay. GAAP now requires that companies capitalize their leases, and that may worsen their leverage, reduce their liquidity, lower their profitability, and reduce their ability to repay.

This webinar will explain why lease capitalization of both operating leases and financing leases will impact the financial condition and performance of borrowers.

Learning Objectives    

Learn the key elements of the lease capitalization GAAP

  • Explain how lease capitalization will put both the lease liability and the right-of-use asset on the borrower’s balance sheet
  • Offer guidance on what items of financial condition and performance will be most impacted and tips on how to underwrite borrowers and advise clients under this new GAAP

Areas Covered

  • Lease capitalization
     - Implementation date
     - Elements of capitalization - capitalization rate, amortization, right-of-use asset, lease liability
     - Operating leases and financing leases
  • Analysis and underwriting
     - Ratio covenants most sensitive - leverage ratio, current ratio
     - Lease cap’s impact on liquidity, leverage, solvency, and profitability
  • Portfolio management
     - Identification of industries and borrowers most sensitive to lease cap
     - Review and restructuring as needed of loans with financial covenants affected by lease cap

Course Level - Basic/Fundamental

Who Should Attend

  • Credit policy managers
  • Credit managers
  • Credit Risk Managers
  • Credit approval officers
  • Risk Managers
  • Enterprise Risk Managers
  • Chief Credit Officers
  • Senior Lenders
  • Senior Lending Officer
  • Bank Director
  • Chief Executive Officer
  • Bank President
  • Board Chairman
  • $200.00



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