Operating leases have historically been controversial becaus

Operating leases have historically been controversial because there was no requirement for disclosure of the lease arrangements anywhere in the financial statements.

Solution

Lease is defined as a contract between two parties for use of assets of one parties by paying rent for using assets. the owner of assets is calls Lessor and the person who use assets is called Lessee.

Theer is two type lease contract, Operating lease and financial lease. in operating lease, periodic lease payment is reported in income statement as expense and in financig lease, assets are reported in balance sheet.

So, given statement is false.