Leasing Loses Altitude While Ownership Takes Off: Real Effects of the New Lease Standard

• 成果类型: Article
• 署名作者: Li, Bin; Venkatachalam, Mohan
• 署名单位: University of Houston System; University of Houston; Duke University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2022-0290
• 发表日期: 2024
• 页码: 315-347
• 关键词: financial-reporting quality; corporate-investment; performance-measures; efficiency evidence; PRIVATE; earnings; CONSEQUENCES; POWER

摘要

This paper evaluates the real effects of the new lease standard, ASC 842, on firms' investment and operational outcomes. Using a sample of airline companies, we find that, subsequent to the promulgation of ASC 842 (2016-2018), public airlines reduce operating lease usage by about seven to ten percentage points relative to private airlines. The reduced lease usage is replaced by increased ownership, suggesting an equilibrium shift in firms' investment due to changes in the cost -benefit tradeoffs associated with the operating lease classification. We also find evidence that the decline in lease usage hinders public airlines' operational flexibility, as we observe more idle capacity in flights post-ASC 842. Facing excess capacity, public airlines seem to deploy their aircraft to shorter flying routes, raising the possibility of more wear and tear on the fleet. Overall, our evidence suggests that the new lease standard has intended and unintended real effects.