Kilpatrick, Bob G. and Wilburn, Nancy L. (2006) Off-balance sheet arrangements: Revisiting constructive capitalization of operating leases by lessees: Working paper series--06-03. Working Paper. NAU W.A. Franke College of Business.
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Abstract
This study presents the 2004 financial statement impact of constructive capitalization of operating leases for nine firms originally included in a study by Imhoff et al. (1991). The method of constructive capitalization follows the same approach and compares 2004 data with their original 1987 data. Results suggest that in 2004, constructive capitalization of operating leases has a larger, material impact on reported liabilities and financial ratios than in 1987. Indeed, large increases in absolute dollar measurements of debt created by capitalizing operating leases were observed (an average increase of $1.9 billion, or 267%). Moreover, relative changes, measured as the average percentage increase in total debt (a 20% increase), debt-to-assets (a 4.7% increase), and ROA (a 1.3% decrease), suggest that these firms use operating leases to a larger extent than in previous years.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Publisher’s Statement: | Copyright, where appropriate, is held by the author. |
| ID number or DOI: | 06-03 |
| Keywords: | Working paper, Off-Balance Sheet Arrangements |
| Subjects: | H Social Sciences > HG Finance |
| NAU Depositing Author Academic Status: | Faculty/Staff |
| Department/Unit: | The W.A. Franke College of Business |
| Date Deposited: | 18 Oct 2015 02:23 |
| URI: | http://openknowledge.nau.edu/id/eprint/1554 |
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