Analyzing, Interpreting and Capitalizing Operating Leases Goldman Sachs\' 10-K r

Question

Analyzing, Interpreting and Capitalizing Operating Leases
Goldman Sachs' 10-K report contains the following lease footnote. This is the only information it discloses relating to its leasing activity.

The firm has contractual obligations under long-term noncancelable lease agreements for office space expiring on various dates through 2069. Rent charged to operating expense was $249 million for 2015. The table below presents future minimum rental payments, net of minimum sublease rentals.

(c) Using a 6% discount rate and rounding the remaining lease life to the nearest whole year, estimate the assets and liabilities that Goldman Sachs fails to report as a result of its off-balance-sheet lease financing. (Use a financial calculator or Excel to compute. Do not round until your final answers. Round each answer to the nearest whole number.)

Incorrect
Mark 0.00 out of 1.00

*Use subsequent rounded answers to compute total.

$ in millions As of December 2015 2016 $317 2017 313 2018 301 2019 258 2020 226 2021-thereafter 1,160 Total $2,575

Explanation / Answer

Sr. no. Year Lease rentals Discount factor @ 6% Present value 1 Year 1 $317 0.943396226 $299.06 2 Year 2 $313 0.88999644 $278.57 3 Year 3 $301 0.839619283 $252.73 4 Year 4 $258 0.792093663 $204.36 5 Year 5 $226 0.747258173 $168.88 6 after Year 5 $1,160 0.70496054 $817.75 Total $2,021.00

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.