EconPapers    
Economics at your fingertips  
 

Effect of Capitalizing Operating Leases on Credit Ratings:Evidence from Japan

Masaki Kusano

Discussion papers from Graduate School of Economics , Kyoto University

Abstract: The purpose of this study is to examine the effects of constructively capitalizing operating leases on credit ratings in Japan. In particular, this study investigates whether and how a credit rating agency considers operating lease information when determining credit ratings. First, this study shows that constructively capitalized operating leases are associated with credit ratings. Second, this study finds that the associations between credit ratings and operating leases versus finance leases are not substantially different. However, when operating lease disclosures are less reliable, this study finds that operating leases are not associated with credit ratings and that the risk relevance of operating leases is substantially different from that of finance leases. This study reports that the reliability of accounting information has significant effects on the risk relevance of operating leases. These results indicate that a credit rating agency considers operating lease information in determining credit ratings to the extent that this information is reliable. This study contributes to the literature on the usefulness of operating lease disclosures and to the discussions on the global convergence of accounting standards.

Keywords: Constructive Capitalization; Operating Leases; Risk Relevance; Reliability (search for similar items in EconPapers)
JEL-codes: M41 M48 (search for similar items in EconPapers)
Date: 2017-03
New Economics Papers: this item is included in nep-acc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.econ.kyoto-u.ac.jp/dp/papers/e-16-016.pdf (application/pdf)

Related works:
Journal Article: Effect of capitalizing operating leases on credit ratings: Evidence from Japan (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kue:epaper:e-16-016

Access Statistics for this paper

More papers in Discussion papers from Graduate School of Economics , Kyoto University Contact information at EDIRC.
Bibliographic data for series maintained by Graduate School of Economics Project Center ().

 
Page updated 2020-10-11
Handle: RePEc:kue:epaper:e-16-016