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Recognition versus Disclosure: An Investigation of the Impact on Equity Risk Using UK Operating Lease Disclosures

Beattie, V., Goodacre, A., and Thomson, S. (2000) Recognition versus Disclosure: An Investigation of the Impact on Equity Risk Using UK Operating Lease Disclosures. Journal of Business Finance and Accounting, 27 (9 and ). pp. 1185-1224. ISSN 0306-686X (doi:10.1111/1468-5957.00352)

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Publisher's URL: http://dx.doi.org/10.1111/1468-5957.00352

Abstract

This study examines the equivalency of accounting recognition versus disclosure. OLS regression analysis is used to determine whether there is an association between equity risk and an adjustment to financial risk for off-balance sheet operating leases. Two methods of adjustment are considered: constructive capitalisation and a simple factor method. The observation of a reliably positive association suggests that UK investors/analysts view operating leases from a property rights perspective rather than an ownership perspective. This supports the argument for recognition of all lease rights and obligations 'on-balance sheet', as proposed in the recent G4+1 discussion paper ASB (1999).

Item Type:Article
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Beattie, Prof Vivien
Authors: Beattie, V., Goodacre, A., and Thomson, S.
Subjects:H Social Sciences > HF Commerce > HF5601 Accounting
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Journal of Business Finance and Accounting
Publisher:Blackwell Publishing
ISSN:0306-686X
Copyright Holders:© Blackwell Publishing
First Published:First published in Journal of Business Finance and Accounting 27(9and 10):1185-1224
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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