When working out the total interest-bearing debt a company has, should I also include any lease obligations that they may have?
From what I understand of operating leases, this is just normal renting of an asset and so doesn’t count as debt and can be ignored. However, what about for finance or capital leases? From my research (I don’t have an accounting background) in a finance lease the lessee buys the item and then pays it back in instalments (see https://www.wallstreetmojo.com/financial-lease-vs-operating-lease/). From my understanding the instalments don’t count as interest payments and thus don’t need to be included in the debt calculation.
A financial lease is a financing product where the end result is to transfer ownership to the customer.
Although considered as a liability in accounting terms and accounted for differently to an operating lease, from a Shariah perspective, the full value of the finance is not a liability if it is structured in a Shariah compliant way.
And is the implication of a financial lease not being Shariah compliant being the installments are Riba and so should be included in interest-bearing debt?
I don’t have a finance background, and I’m pretty much learning in my investment journey, so I won’t know how to determine if a company’s leases are Shariah compliant or not, assuming of course they disclose such information.