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December 2019​ Message from CIQ

Due to new accounting standards issued by the Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB), we have updated the way we calculate standardized debt, PP&E (property, plant, & equipment), and EBITDA data items on the S&P Capital IQ platform.

Specifically, we created a new standardization policy that reflects the requirement that companies now capitalize their operating leases on their balance sheet:

• Right-of-Use-Assets: collected as PP&E
• Lease Liabilities: collected as debt

As a result of this new policy, you can expect to see the following changes to our fundamental data on the S&P Capital IQ platform:

Balance Sheet

• Lease liabilities are included in “Current Portion of Capital Lease Obligations [1090]” and “Capital Leases [1183]”, which are components of “Total Debt [4173]”
• "Net Property, Plant & Equipment [1004]" will include the Right-of-Use-Asset [ROU Asset] value

Income Statement

• One additional supplemental income statement item will be collected - Interest Expenses on Lease Liability/Debt [48907]
• "Depreciation on Right-of-Use-Assets [48357]' is not included in the calculation of EBITDA
• Accounting changes impact how companies report the values seen on their income statements

Cash Flow Statement & Supplemental Data Collection

• No changes to how we collect main cash flow statement, but we now collect 4 additional supplemental items
• Accounting changes impact how companies report cash from operations and cash from financing

We understand that our policy changes led to some inconsistencies in certain multiples and ratios that use debt and/or EBITDA. In an upcoming release, we plan to make adjustments to the calculation of EBITDA in order to correct for these inconsistencies.

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