Same rent, same cash, a different EBITDA.

Two companies trade at the same EV/EBITDA. One reports under IFRS, the other under US GAAP, and both pay the same rent on the same kind of shop.

Both recognize the lease on the balance sheet. IFRS 16 has no operating lease for the lessee, so the rent becomes depreciation and interest, both below EBITDA. Under ASC 842, a lease classified as operating keeps a single lease cost inside operating expenses, so it reduces EBITDA.

Illustrative. The bars show where the cost of the same lease lands, not its size.

Same cash out, same shop, a different EBITDA. The multiples look comparable, and they are not until both sides are put on the same lease basis.