Before the current standards, leases were rent expense and a footnote. Retailers with hundreds of stores carried enormous commitments invisible on the balance-sheet. The rules now capitalise them, which raised reported assets and liabilities across whole sectors without changing any cash flow.
Because the charge stays in operating expense rather than splitting into interest and depreciation, ebitda treatment of operating leases differs from finance-lease treatment, which matters when comparing a leasing retailer with an owning one.
Example: Northwind's retail arm leases 140 stores. The right-of-use asset is $126M and the lease liability $130M, lifting reported total-debt by a fifth with no change in the rent cheque.
Related: finance-lease, total-debt, off-balance-sheet, ebitda, net-debt-to-ebitda