As part of the Dean's Distinguished Speaker Series, Saunders College of Business is proud to host Professor Wayne Thomas, Ph.D., senior associate dean and chair of the Price College of Business John T. Steed School of Accounting at the University of Oklahoma on Friday, November 11, 2022, from 10:30 a.m. to 12 p.m. This event is open to all faculty and graduate students.
Wayne B. Thomas, Ph.D.
Senior Associate Chair for Faculty and Research Innovation
George Lynn Cross Research Professor
David C. Steed Chair in Accounting
The University of Oklahoma | John T. Steed School of Accounting
Topic: Economic Consequences of Operating Lease Recognition
Abstract: Accounting Standards Update No. 2016-02 (ASU 2016-02) generated considerable debate between managers and standard setters. We find evidence that after issuance of ASU 2016-02, lessee firms decreased their use of long-term operating leases, increased their use of short-term operating leases, and increased their use of capital expenditures. The shift from long-term operating leases to capital expenditures is more pronounced for firms that had greater reporting incentives to use operating leases prior to ASU 2016-02. However, we find no evidence that the change in leasing behavior leads to negative outcomes predicted by managers (i.e., no evidence of a decrease in reported firm performance, a decrease in firm value, increase in firm risk, decrease in credit ratings, increase in debt covenant violations, or decrease in employment). Our study adds to the literature on the real impacts of accounting standards on managers’ investment behavior and economic consequences for lessee firms and their stakeholders.
When and Where
This is an RIT Only Event