Comparing the effects of IASB Proposal on leasing: an impact assessment of EU listed Companies

Autori/Curatori Tommaso Fabi, Enrico Laghi, Marco Mattei, Alessandro Sura
Anno di pubblicazione 2015 Fascicolo 2014/2-3-4 Lingua Inglese
Numero pagine 41 P. 17-57 Dimensione file 411 KB
DOI 10.3280/FR2014-002002
Il DOI è il codice a barre della proprietà intellettuale: per saperne di più clicca qui

Qui sotto puoi vedere in anteprima la prima pagina di questo articolo.

Se questo articolo ti interessa, lo puoi acquistare (e scaricare in formato pdf) seguendo le facili indicazioni per acquistare il download credit. Acquista Download Credits per scaricare questo Articolo in formato PDF

Anteprima articolo

FrancoAngeli è membro della Publishers International Linking Association, Inc (PILA)associazione indipendente e non profit per facilitare (attraverso i servizi tecnologici implementati da l’accesso degli studiosi ai contenuti digitali nelle pubblicazioni professionali e scientifiche

In August 2010, the IASB and the FASB jointly released an exposure draft proposing a "right-of-use" model for the recognition of lease-related assets and liabilities. The literature shows that leasing is a relevant subject for study. Many studies have investigated the point of view of users and preparers about lease accounting. Moreover, significant studies on the impact assessment of new accounting models for leases have been conducted. The objective of this paper is to perform an impact assessment of the new standard on leases that takes into account companies listed on the main EU stock exchanges. Specifically, this paper try to estimate the magnitude of the change in some ratios that would have been produced by the new treatment with reference to 2011. The results of the paper show that the debt-to-equity ratio increased significantly and, subject to the IASB final decisions on profit or loss accounting, the EBITDA should also have increased, while ROA should not significantly be affected. Furthermore, the results show that the impact of the introduction of the IASB proposal on financial ratios will differ both among industries and among European Union countries.

Keywords:IAS 17; leasing, right of use, impact assessment, lease capitalization

  1. Ang J. and Peterson P.P. (1984), The leasing puzzle, The Journal of Finance, 39 (4), pp. 1055-1065, DOI: 10.1111/j.1540-6261.1984.tb03892.x
  2. Barone E., Birt J. and Moya S. (2014), Lease Accounting: A Review of Recent Literature, Accounting in Europe, 11 (1), pp. 35-54.
  3. Beattie V.A., Edwards K. and Goodacre A. (1998), The impact of constructive operating lease capitalization on key accounting ratios, Accounting and Business Research, 28 (4), pp. 233-254, DOI: 10.1080/00014788.1998.9728913
  4. Beattie V., Goodacre A. and Thomson S.J. (2006), International lease-accounting reform and economic consequences: The views of U.K. users and preparers, International Journal of Accounting, 41 (1), pp. 75-103, DOI: 10.1016/j.intacc.2005.12.003
  5. Beattie V., Goodacre A. and Thomson S. (2000), Recognition versus disclosure: an investigation of the impact on equity risk using UK operating lease disclosures, Journal of Business Finance & Accounting, 27 (9/10), pp. 1185-1224, DOI: 10.1111/1468-5957.00352
  6. Bennett B.K. and Bradbury M.E. (2003), Capitalizing non-cancelable operating leases, Journal of International Financial Management and Accounting, 12 (2), pp. 101-114, DOI: 10.1111/1467-646X.00091
  7. Boatsman J. and Dong X. (2011), Equity value implications of lease accounting, Accounting Horizons, 25 (1), pp. 1-16, DOI: 10.2308/acch.2011.25.1.1.BranswijckD.,LonguevilleS.andEveraertP.(2011),ThefinancialimpactoftheproposedamendmentstoIAS17:EvidencefromBelgiumandtheNetherlands,AccountingandManagementInformationSystems,10(2),pp.275-294
  8. Cornaggia K.J., Franzen L.A. and Simin T.T. (2013), Bringing leased assets onto the balance sheet, Journal of Corporate Finance, 22, pp. 345-360.
  9. Cosci S., Guida R. and Meliciani V. (2013), Leasing decisions and credit constraints: Empirical analysis on a sample of Italian firms, European Financial Management, DOI: 10.1111/j.1468-036X.2013.12019.x
  10. Duke J.C., Hsieh S.J. and Su Y. (2009), Operating and synthetic leases: Exploiting financial benefits in the post-Enron era, Advances in Accounting, 25 (1), pp. 28-39.
  11. Durocher S. (2005), The capitalization of operating leases: A Canadian study, Unpublished EAA Paper (28th EAA annual congress in Gothenburg, Sweden).
  12. Durocher S. (2008), Canadian evidence on the constructive capitalization of operating leases, Accounting Perspective, 7 (3), pp. 227-56.
  13. El-Gazzar S.M. (1993), Stock market effects of the closeness to debt covenant restrictions resulting from capitalization, Accounting Review: A Quarterly Journal of the American Accounting Association, 68 (2), pp. 258-272.
  14. Ely K.M. (1995), Operating lease accounting and the market’s assessment of equity risk, Journal of Accounting Research, pp. 397-415, DOI: 10.2307/2491495
  15. Fülbier R.U., Silva J.L. and Pferdehirt M.H. (2008), Impact of Lease Capitalization on financial ratio of listed German Companies, Schmalenbach Business Review, 60 (2), pp. 122-144.
  16. Gallery G. and Imhoff E.A. (1998), Disclosure versus recognition: Some evidence from the Australian capital market regarding off-balance sheet leasing, University of Melbourne, Research Seminar Series.
  17. Garrod N. (1989), Regulation and response: The case of lease disclosure in the UK, Research in Accounting Regulation, 3, pp. 69-92.
  18. Goodacre A. (2003a), Operating lease finance in the U.K. retail sector, The International Review of Retail, Distribution and Consumer Research, 13 (1), pp. 99-125, DOI: 10.1080/0959396032000065373
  19. Goodacre A. (2003b), Assessing the potential impact of lease accounting reform: a review of the empirical evidence, Journal of Property Research, 20 (1), pp. 49-66.
  20. Gritta R.D. (1974), The impact of the capitalization of leases on financial analysis: A case study in air transport, Financial Analysts Journal, 30, pp. 47-52, DOI: 10.2469/faj.v30.n2.47
  21. Gritta R.D., Lippman E. and Chow G. (1994), The impact of the capitalization of leases on airline financial analysis: An issue revisited, Logistics and Transportation Review, 30, pp. 189-202.
  22. Gujarati D.N. and Porter D.C. (2009), Basic Econometrics. (5th Edition) (New York: McGraw-Hill).
  23. Houlihan W.A. and Sondhi A.C. (1984), De facto capitalization of operating leases:
  24. The effect on debt capacity, Corporate Accounting, 2, pp. 3-13. Imhoff E.A., Lipe R.C. and Wright D.W. (1991), Operating leases: Impact of constructive capitalization, Accounting Horizons, 5 (1), pp. 51-63.
  25. Imhoff E.A., Lipe R.C. and Wright D.W. (1993), The effects of recognition verses
  26. disclosure on shareholder risk and executive compensation, Journal of Accounting, Audition, and Finance, 8 (4), pp. 335-368.
  27. Imhoff E.A., Lipe R.C. and Wright D.W. (1997), Operating leases: Income effects of constructive capitalization, Accounting Horizons, 11 (2), pp. 12-32.
  28. International Accounting Standards Board, Exposure Draft ED/2010/9, Leases.
  29. International Accounting Standards Board, Exposure Draft ED/2013/6, Leases.
  30. International Accounting Standards Board, International Accounting Standard n. 17, Leases.
  31. International Accounting Standards Board, International Accounting Standard n. 16, Property, Plant and Equipment.
  32. International Accounting Standards Board, International Accounting Standard n. 38, Intangible Assets.
  33. Jennings R. and Marques A. (2012), Amortized cost for operating lease assets, Accounting Horizons, 27 (1), pp. 51-74, DOI: 10.2308/acch-50278
  34. Kemp R.S. and Overstreet G.A. (1990), A study of the information needs of commercial loan officers, Journal of Commercial Bank Lending, 72 (6), pp. 47-57.
  35. Kilpatrick B.G. and Wilburn N.L. (2007), Off-balance-sheet financing & operating leases impact on lessee financial ratios, RMA Journal, 89, pp. 80-87.
  36. Lanfranconi C.P. and Wiedman C. (2000), If one goes, will the other follow? Operating leases and off-balance-sheet accounting, Ivey Business Journal, 64 (6), pp. 61-65.
  37. Lückerath-Rovers M. and de Bos A. (2005), The decision usefulness of operating lease disclosure: An empirical investigation among Dutch listed companies, Unpublished EAA Paper (28th EAA annual congress in Gothenburg, Sweden).
  38. Nelson A.T. (1963), Capitalizing leases: The effect on financial ratios, Journal of Accountancy, 41, pp. 49-58.
  39. Organismo Italiano di Contabilità (OIC), Feedback Statement: consultazione con gli analisti finanziari in merito alla proposta IASB sulla contabilizzazione dei contratti di leasing,
  40. Sannella A. (1989), The capitalization of operating leases: The discounted cash flow approach, Journal of Commercial Bank Lending, 72, pp. 49-55.
  41. Sharpe S.A. and Nguyen H.H. (1995), Capital market imperfections and the incentive to lease, Journal of Financial Economics, 39 (2), pp. 271-294, DOI: 10.1016/0304-405X(95)00830-8
  42. Stanga K.G. and Tiller M.G. (1983), Needs of loan officers for accounting information from large versus small companies, Accounting and Business Research, 14 (53), pp. 63-70, DOI: 10.1080/00014788.1983.9729188
  43. White E. (2013), Global Leasing Report. (Milton Keynes, UK: White Clarke).
  44. White H. (1980), A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica, 48 (4), pp. 817-838, DOI: 10.2307/1912934,JSTOR1912934,MR575027

  • Capitalisation of operating lease and its impact on firm’s financial ratios: Evidence from Italian listed companies Roberto Maglio, Valerio Rapone, Andrea Rey, in Corporate Ownership and Control /2018 pp.152
    DOI: 10.22495/cocv15i3c1p1

Tommaso Fabi, Enrico Laghi, Marco Mattei, Alessandro Sura, Comparing the effects of IASB Proposal on leasing: an impact assessment of EU listed Companies in "FINANCIAL REPORTING" 2-3-4/2014, pp 17-57, DOI: 10.3280/FR2014-002002