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Economic Consequences of the Potential Capitalization of Operating Leases : The German Case
Type
conference paper
Date Issued
2013-08-07
Author(s)
Abstract
In the coming renewal of lease accounting standards, IFRS and IASB aim to abolish the classification into operating and financial leases by introducing the right-of-use concept. This results in recognizing all leases as financial leases and thus activating the respective items in the lessee's balance sheet. Prior literature focused on the notable effects of this accounting change on key financial indicators. This paper analyzes if announcements of the coming introduction of the right-of-use method had any real effects on the stock prices of DAX 30 companies using operating leasing as a form of financing. The results do not show any significant impact on stock prices. Findings indicate that prior studies, which found key indicators to change heavily, might have overstated the real impact of the proposed lease accounting changes.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Book title
Brilliantly Disguised Opportunities
Publisher
Amercian Accounting Association
Publisher place
Sarasota, FL
Event Title
2013 American Accounting Association (AAA) Annual Meeting
Event Location
Anaheim, CA, USA
Event Date
03.-07.08.2013
Subject(s)
Eprints ID
221933