Mich Oon asked 2 years ago
Hi, I'm looking at Ulta Beauty Inc and under their balance sheets, there's a line 'Operating lease assets'. From my understanding, the operating lease assets does not belong to the company hence I should not need to include them in my considerations eg in the 'Net PPE' or when i calculate FA/TA right?
In 2023, net PPE is $1.009mil and 'Operating lease assets' is $1.561mil. Seems like a big chunk of assets hence I'm not sure if it should be included in my calculations or not.
Please do correct me if my understanding is wrong though.
PS: wanted to include screenshot of the balance sheet but can't seem to upload any images
1 Answers
Victor Chng Staff answered 2 years ago
Hi Mich,
The operating lease is not part of PPE. It refers to a new accounting standard introduced in recent years. It represents the future rental payments owed to the landlord under the lease agreement.
The operating lease is not part of PPE. It refers to a new accounting standard introduced in recent years. It represents the future rental payments owed to the landlord under the lease agreement.
Mich Oon
replied 2 years ago Okay, thanks Victor!
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