Capitalization Versus Disclosure: The Impact of Operating Lease Capitalization on Managerial Leasing Decisions

Current Expected Credit Losses (CECL) Standard and Banks' Information Production

“…Cheng et al [2018] finds that firms affected by the accounting standard on acquired goodwill and other intangible assets (SFAS 142) provide more accurate management forecasts, consistent with managers acquiring better information while complying with a new accounting rule. Several studies examining the adoption of lease accounting standards claim that firms' investment decisions are affected by the new rule due to the change in the manager's information set [Chen et al, 2019, Chatterjee, 2020, Christensen et al, 2021, Yoon, 2021. We contribute to this literature by showing an important channel through which the new accounting standard improves the adopting firms' information environment, namely the investment in information systems and human capital related to the new accounting standard.…”

Labor Costs of Implementing New Accounting Standards

“…These changes may affect ratios and performance measures such as price-to-earnings ratio, book-to-market ratio, profit margin, interest coverage ratio, debt-to-equity ratio, sales and profit growth, return in equity, and return on assets. Literature on Topic 842 points to improved investment efficiency, as the new standard discourages the use of excessive operating leases to ostensibly improve financial ratios from off-balance-sheet treatments (Chatterjee 2020;Christensen, Lynch, and Partridge 2021;Ma and Thomas 2021;Yoon 2021).…”