The paper aims to assess the International Financial Reporting Standard (IFRS) 16 "Leases" impact on the lessees' financial situation. The study was conducted on the financial data for 2018-2019 of 494 companies listed on the Warsaw Stock Exchange using the difference-in-differences (DID)...

This paper studies the role of shareholder activism on corporate leases. We find that the presence of shareholder activists is associated with large increases in leasing. This association is stronger in periods of high real estate prices and for firms with larger amounts of real estate assets....

Payday loans, consumer leases and, increasingly, buy-now-pay-later (BNPL) products occupy a central place in Australian consumer law and policy debates. These products have all been identified by consumer advocates as a source of financial stress. Credit cards typically receive far less...

Based on the data of A-share companies in Shanghai and Shenzhen from 2007 to 2019, this paper conducts an empirical analysis on the impact of Chinese entity enterprises' sharing and holding financial leasing companies on their business performance. We find that holding the financial leasing...

This paper argues that leasing, as an important but often ignored source of external financing, facilitates the allocation efficiency of finance. We document a large overestimation of measured finance misallocation (Whited and Zhao, 2021) when lease-induced debt is ignored among US manufacturing...

More than 50% of airline aircraft in the world are leased. The article analyzes the global aviation leasing market, including the largest lessor companies. Companies from China are of particular interest. In addition, the positions of Russian companies are analyzed, both from the supply side and...

Formal written land leasing contracts offer an alternative to land purchase for those farmers wishing to expand their land area and provide greater security relative to informal short-term rental agreements and are particularly important for beginning farmers with resources insufficient to...

Since 1993, the Ethiopian government has been using the urban land leasing system to monetize the increase in land value created due to factors other than private investment. Thus, this paper aims to explore and understand whether Bahir Dar city is leveraging the urban land lease system as a...

We examine how the implementation of the K-IFRS No.1116 Lease affects firm value. This new accounting standard mandates capitalization of all leases, resulting in changes in the key accounting leverage ratios and rates of return. The contracting costs hypothesis suggests that changes in...

As developers and companies around the world recognize the ineffeciency and costs associated with maintaining their own datacenters and computer hardware, the cloud providers beckon, offering worry-free maintenance, unlimited scalability, substantial cost savings, and automatic updating....

Although access-based business models such as product rental hold promise for contributing to sustainable production and consumption, their diffusion is hindered by a lack of consumer acceptance. In order for rental models to resonate with consumers, they must be designed and communicated in a...

The study examined the effect of lease financing on the performance of quoted consumer goods companies in Nigeria for the period - 2009 to 2018. Specifically, the study assesses the effect of finance or capital lease, leveraged lease, and the moderating effect of firm size on lease financing and...

This paper argues that leasing, as an important but often ignored source of external financing, facilitates the allocation efficiency of finance. We document a large overestimation of measured finance misallocation (Whited and Zhao, 2021) when lease-induced debt is ignored among US manufacturing...

This study finds that the requirement of ASC 842 for firms to capitalize operating leases in financial statements beginning in 2019 resulted in firms affected by the standard reducing existing debt amounts on average between 7% and 10% relative to unaffected firms. We also find that firms with...

We examine the real effects of lease capitalization rules (i.e., standards that require firms to capitalize finance leases) on corporate investment. We show that the introduction of these rules leads to a decrease in investment, which is more pronounced for firms with high reliance on leases. We...

We apply latent Dirichlet allocation to examine the textual characteristics of firms’ transition disclosures in the context of the adoption of Accounting Standard Codification (ASC) 842 on leases. We find that firms’ lease transition disclosures become less readable and more dissimilar the...

In this paper, we argue that leasing is an important alternative way of capital reallocation. We propose a broader measure of capital reallocation, which not only includes asset purchase and sale, but also considers lease. Empirically, we show that the lease-induced reallocation component is...

This paper explores the connection between tenant riskiness, commercial lease length and the term structure of lease contracts. Theory shows that the possibility of default on a long-term lease generates a risk/lease-length connection. The empirical work uses a large CompStak lease dataset...

The main objective of this study is to determine a lease agreement to finance an investment project and a solution for managing credit risk. This study investigates three types of contingent leases to reduce the costs associated with bankruptcy and compensate for the lessor's position. A leasing...

Oil and gas leases between mineral owners and extraction firms ubiquitously include royalty and primary term clauses. The royalty denotes the share of revenue that is paid to the mineral owner, and the primary term specifies the date by which the firm must complete a well, lest it lose the...

Small- and medium-sized enterprises (SMEs) are the backbone of the economy and their need to be financed remains one of the most discussed topics in the business world (World Bank, 2014; IFC, 2010). Financial leasing is a midterm financial instrument mainly used for the procurement of machinery,...

What incentives do managers face that might give rise to inefficient investments in leases? If managers make inefficient investments in leases, what economic consequences arise for those managers and their firms? We develop a model of expected investments in leased assets and use the residuals...

We construct a two-period model of the supply chain's openness in a durable goods market by introducing two marketing modes: leasing and selling. Given a marketing mode, at the beginning of the first period, an incumbent supplier and the downstream monopolist choose one of the trading modes: (i)...

Demosthenes (382-322 BC) wrote numerous legal speeches, which provide a plethora of cues about public and private law in Athens during the 4th century BC. In his speech “Paragraphe pros Pantaineton”, Demosthenes described a complex financial transaction composed of a sale, a lease, and a...

As the concept of lease finance has been emerged only after World War II in the community of bankers, it has proved itself as one of the inadvertent source of corporate finance in contemporary time. Moreover, under the two fork of the lease procedure, operating lease is practiced by the economic...

COVID-19 has launched a flurry of contractual questions. Commercial leases during the pandemic present a unique challenge to the existing Canadian common law, renewing the doctrinal debate on the differences between hardship and frustration. This paper will argue that the doctrine of...

The Financial Accounting Standard Board’s Accounting Standards Update No. 2016-02 generated considerable debate between managers and standard setters. The purpose of our study is to understand the reporting effects of ASU 2016-02 and how its issuance and implementation affected managers’...

We construct a two-period model of the supply chain's openness in a durable goods market by introducing two marketing modes: leasing and selling. Given a marketing mode, at the beginning of the first period, an incumbent supplier and the downstream monopolist choose one of the trading modes: (i)...

Our study addresses two issues overlooked in prior research: Does a firm’s future operating lease obligations influence its current cash holdings? Does this relationship contribute to the temporal increase in corporate cash holdings? We provide evidence that these future obligations...

Terminal Rental Adjustment Clause (TRAC) vehicle leasing is the most popular way to lease fleets of trucks and cars in America. This article describes the origins of TRAC vehicle leasing, the challenges that emerged in the 1980s to characterizing TRAC vehicle leases as "true leases," and the...

By analyzing a hand-collected transaction-level dataset on the finance leases of China’s public firms for the period 2007-2019, this paper sheds light on China’s financial leasing industry. We find that banks use their affiliated leasing firms to provide credit to constrained clients in...

Firms make extensive use of operating leases, but unlike other types of debt, their balance sheet value is set by the firm. Using novel information on operating leases from new reporting requirements (ASC 842) we examine firm behavior in valuing these leases, specifically, discount rate choices....

For centuries, learned scholars and judges have expounded their views of the distinctions between sales and leases. The distinction has resulted in differential treatment of sales and leases in such areas as bankruptcy, tax, remedies on default, and filing requirements. Recently, several...

Leasing's impact on leverage remains an open debate in the literature. Some argue that leasing and secured debt are substitutes, while others argue that leasing can preserve secured debt capacity and facilitate greater borrowing. I exploit a Moody's accounting policy change that unexpectedly...

In this paper, we argue that leasing is an important alternative way of capital reallocation, complementary to directly purchasing capital from the reallocation market, and it significantly mitigates credit-constraint-induced capital misallocation. However, in the existing literature, leased...

The Ministry of Finance of China has proposed a new lease accounting model to the existing lease accounting standard that requires the capitalization of all operating leases as assets and liabilities. In this case study, the key effects of the application of a new accounting standard —...