| Autor: |
Altamuro, Jennifer, Johnston, Rick, Pandit, Shailendra (Shail), Zhang, Haiwen (Helen) |
| Předmět: |
|
| Zdroj: |
Contemporary Accounting Research; Summer2014, Vol. 31 Issue 2, p551-580, 30p |
| Abstrakt: |
Regulators have raised concerns that the current accounting treatment for leases may allow firms to behave opportunistically and that a lack of reporting transparency further raises the risk that operating leases will not be appropriately considered by users of financial statements, potentially resulting in capital misallocation. We examine whether banks incorporate operating leases in their credit assessments through the interest rate charged on loans and whether lease and lessee characteristics affect loan spreads. Our tests exploit the differential explanatory power and model fit of as-reported financial ratios versus lease-adjusted ratios in multivariate regressions of loan spreads. The results support that lease adjusted financial ratios better explain loan spreads, especially for larger lenders and that retailer leases are less relevant for credit risk assessments. We conclude that banks not only price operating leases, on average, but also make distinctions about which leases should be priced. Second, we explore the role of credit rating agencies and confirm that credit ratings also reflect capitalized operating leases and find support for an informational role for others’ credit assessments. Overall, our results suggest that banks and rating agencies adjust for the off-balance sheet presentation of operating leases and, at least in the case of banks, attempt to reflect the underlying economics of the leases. This evidence lessens concern over the potential negative consequences of existing operating lease accounting while it raises concern over proposed accounting that capitalizes all leases regardless of their economic characteristics. [ABSTRACT FROM AUTHOR] |
| Databáze: |
Complementary Index |
| Externí odkaz: |
|
