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Goldman Sachs Q1 2019 Lease Analysis

- Goldman Sachs adopted new lease accounting standards (ASC 842) in January 2019 which requires companies to recognize operating lease right-of-use assets and liabilities on their balance sheet. - For the quarter ended March 31, 2019, Goldman Sachs reported $2,386 million in operating lease right-of-use assets and $2,413 million in operating lease liabilities. - Calculations using the future operating lease payment information reported by Goldman Sachs verify the $2,413 million operating lease liability reported for March 31, 2019.

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242 views3 pages

Goldman Sachs Q1 2019 Lease Analysis

- Goldman Sachs adopted new lease accounting standards (ASC 842) in January 2019 which requires companies to recognize operating lease right-of-use assets and liabilities on their balance sheet. - For the quarter ended March 31, 2019, Goldman Sachs reported $2,386 million in operating lease right-of-use assets and $2,413 million in operating lease liabilities. - Calculations using the future operating lease payment information reported by Goldman Sachs verify the $2,413 million operating lease liability reported for March 31, 2019.

Uploaded by

zuhaib zulfiqar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Analyzing, Interpreting, and Capitalizing Operating Lease

Goldman Sachs’ SEC filing for the quarter ended March 31, 2019, report contains the
following lease footnote.
Leases (ASC 842). In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic
842). This ASU requires that, for leases longer than one year, a lessee recognize in the
statements of financial condition a right-of-use asset and a lease liability. It also requires
that for finance leases, a lessee recognize interest expense on the lease liability, separately
from the amortization of the right-of-use asset in the statements of earnings, while for
operating leases, such amounts should be recognized as a combined expense. The firm
adopted this ASU in January 2019 under a modified retrospective approach.
The table below presents other assets by type.
$ in millions Mar. 2019 Dec. 2018
Property, leasehold improvements and
equipment $19,277 $18,317
Held-to-maturity securities 5,841 1,288
Goodwill and identifiable intangible assets 4,092 4,082
Operating lease right-of-use assets 2,386 -
Income tax-related assets 1,729 1,529
Miscellaneous receivables and other 4,358 5,424
Total $37,683 $30,640
The table below presents other liabilities by type.
$ in millions Mar. 2019 Dec. 2018
Compensation and benefits $3,110 $6,834
Income tax-related liabilities 3,080 2,864
Operating lease liabilities 2,413 -
Noncontrolling interests 1,565 1,568
Employee interests in consolidated
funds 122 122
Accrued expenses and other 5,884 6,219
Total $16,174 $17,607
The table below presents information about future operating lease payments.
$ in millions Mar. 2019
Remainder of 2019 318
2020 341
2021 262
2022 235
2023 204
2024 193
2025-thereafter 2,494
Total undiscounted lease payments 4,047
$ in millions Mar. 2019
Imputed interest (1,634)
Total operating lease liabilities $2,413
Weighted average remaining lease
term 18 years
Weighted average discount rate 4.85%
Goldman Sachs’s 10-K report for the year ended December 31, 2018, included the following
table about future cash payments required under operating leases.
$ in millions Dec. 2018
2019 $281
2020 271
2021 218
2022 177
2023 142
2024 -
thereafter 1,310
Total $2,399

What operating lease liability did Goldman Sachs report for the quarter ended March 31,
2019?
0
$Answer
 million

What right-of-use assets did Goldman Sachs report for the quarter ended March 31, 2019?
0
$Answer
 million

Use an Excel spreadsheet and the information on future operating lease payments to verify
the total liabilities of $2,413 million on the 2019 Form 10-Q. Hint: The amount will not be
exactly $2,413.
Enter the amount computed in Excel. Round your final answer to the nearest million.
0
$Answer
 million

Use the information on rental payments from the December 2018 Form 10-K, to calculate
the present value of future payments at year-end. Use the same average weighted lease
term and discount rate Goldman Sachs discloses in the 2019 Form 10-Q.
Enter the amount computed in Excel. Round your final answer to the nearest million.
0
$Answer
 million

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