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Impact of lease capitalization on the financial ratios of listed German companies

Title data

Fülbier, Rolf Uwe ; Lirio Silva, Jorge ; Pferdehirt, Marc Henrik:
Impact of lease capitalization on the financial ratios of listed German companies.
In: Schmalenbach Business Review. Vol. 60 (April 2008) Issue 2 . - pp. 122-144.
ISSN 1439-2917
DOI: https://doi.org/10.2139/ssrn.918223

Official URL: Volltext

Abstract in another language

The separation of leases into operating and finance leases for accounting purposes can result in incentives to favour operating lease contracts since they avoid on-balance sheet debt. The IASB is conducting an active research project on leasing, following the G4+1 group's research on possible improvements to lease accounting. One discussed alternative suggests treating all leases similar to today's finance leasing. Previous studies have simulated this accounting treatment following the Imhoff/Lipe/Wright (1991, 1997) constructive capitalization method. Our study is - to our knowledge - the first simulation for Germany based on a modified constructive capitalization method and, additionally, a factor model used by Standard & Poor's (CreditStats®). In line with prior literature, our results show notable changes in a variety of financial ratios. Clustering the sample into different industries, we detect significant differences between industry groups. However, the relative ratio-based ranking of the sample companies does not change much. Additionally, we observe that the CreditStats® - model yields fairly comparable results.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Constructive Capitalization; CreditStats; Leases; Off-balance-sheet Debt; Operating Leases; Tweedie Approach
Institutions of the University: Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Chair Business Administration X
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Chair Business Administration X > Chair Business Administration X - Univ.-Prof. Dr. Rolf Uwe Fülbier
Profile Fields > Emerging Fields > Innovation and Consumer Protection
Profile Fields > Emerging Fields > Governance and Responsibility
Profile Fields
Profile Fields > Emerging Fields
Result of work at the UBT: No
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 01 Dec 2014 10:12
Last Modified: 29 Sep 2015 05:30
URI: https://eref.uni-bayreuth.de/id/eprint/4426