Do leases expand debt capacity?

Schallheim, James S.; Wells, Kyle; Whitby, Ryan J.

doi:10.1016/j.jcorpfin.2013.09.004

Cited by 35 publications

(14 citation statements)

References 24 publications

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“…Mellado & Part {Mellado, 2016 #44} also found that companies that have investment-grade "BBB" tend to use operation lease. Meanwhile, Cornaggia et al (30) and (31) found the empirical proof that shows the positive correlation between capital lease and company's loan. Schallheim et al (31) stated that there is a positive correlation between companies that have big credit capacity and the easiness to use loan with operation lease.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Meanwhile, Cornaggia et al (30) and (31) found the empirical proof that shows the positive correlation between capital lease and company's loan. Schallheim et al (31) stated that there is a positive correlation between companies that have big credit capacity and the easiness to use loan with operation lease. The stock analyst reported that the changes in IFRS-16 do not affect the judgment towards their management credibility.…”

Section: Literature Reviewmentioning

confidence: 99%

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Managing Tax Dispute Due to IFRS-16 on the Retrofits Implementation in Indonesia

Nasip¹,

Sudarmaji²

2018

IJET

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The IFRS-16 will shortly be implemented worldwide, where the operating lease is effectively removed, and all operational leases are qualified as debt. The operational lease is a major source and is important for off-balance sheet financing in Indonesia. Therefore, the implementation of IFRS-16 will probably hurt Indonesian business. The contract and/or service level agreements on the retrofits for the energy efficiency product can relieve the business owner from cash flow and new debts. This study established a framework for a critical comparative study; compare and assess the possibility of the retrofit financial practices under the current taxes regime, and the possibility upon IFRS-16 implementation to better understand the favorable measures for retrofit practitioners and future customers to handle the disputes. Triangulate the findings of comparative study and questionnaire survey to develop recommendation for the future researchers, practitioners and the government. The result indicates that the benefits of the retrofits financing implementation beat the cost and complexity posed by the enactment of new IFRS standards. Thus, the impact of the IFRS-16 and taxation are being considered as a part of business constraints that should be addressed together and able to manage the disputes over misperception on retrofits aspects with taxes officers.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Managing Tax Dispute Due to IFRS-16 on the Retrofits Implementation in Indonesia

Nasip¹,

Sudarmaji²

2018

IJET

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“…Second, firms that are not forced to raise additional debt can safeguard their financial reserve or unused debt capacity. Schallheim et al (2013) suggest that firms with financial constraints are forced to use lease contracts due to a drained debt capacity. In contrast, firms with a healthy balance of financial reserve can utilize the unused debt capacity without exceeding the target capital structure when unexpected events occur.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Do joint ventures and strategic alliances create value for bondholders?

Chen

King

Wen

2015

Journal of Banking & Finance

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“…Le crédit-bail a été comparé au crédit classique en termes de coûts d'agence et d'aléa moral, et les taux accordés ont fait l'objet d'études pour comprendre le niveau de risque perçu (par exemple Lease, McConnell, et Schallheim 1990;De Bodt, Filareto, et Lobez 2000;Lobez et Statnik 2007). Le consensus semble aujourd'hui admettre que le crédit-bail puisse être un substitut ou un complément à la dette (Schallheim, Wells, et Whitby 2013) : pour un profil moyen c'est un complément, qui devient substitut lorsque le profil est trop risqué. Dans cette littérature, il ne fait aucun doute pour les financiers qu'il s'agit bien d'un contrat de financement, lu donc dans sa substance.…”

Section: Conséquences Sur Le Crédit-bailunclassified

Le crédit-bail et le principe de substance en France

Brébisson¹

2018

Accra

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Dans un contexte d'harmonisation européenne des règles comptables relancé par l'adoption de la Directive 2013/34, le traitement comptable réservé en France au crédit-bail peine à se justifier. L'article fait le point sur le traitement comptable, financier, fiscal et légal de ces contrats pour mettre en évidence l'anomalie que représente l'article 212-5 du PCG, dernier texte à comprendre le crédit-bail comme un contrat de location. Cette étude vise à contribuer à l'amélioration et à la mise en cohérence du cadre réglementaire français sur ce sujet. Abstract:In the context of European harmonization of accounting rules which was restarted with the adoption of Directive 2013/34, the French accounting treatment of finance leases is hardly justified. This paper reviews accounting, financial, fiscal and legal rules over leases to underline the anomaly represented by article 212-5 in French Chart of Account (PCG), which is the latest text to understand leases as a rental contract. This study aims at contributing to improving French normative environment coherence on this specific issue.

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Do leases expand debt capacity?

Cited by 35 publications

References 24 publications

Managing Tax Dispute Due to IFRS-16 on the Retrofits Implementation in Indonesia

Managing Tax Dispute Due to IFRS-16 on the Retrofits Implementation in Indonesia

Do joint ventures and strategic alliances create value for bondholders?

Le crédit-bail et le principe de substance en France

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