What question did this study set out to answer?

The aim is to determine if leasing practices affected the systematic risk of companies following regulatory changes.

March 18, 2026

Lease Capitalization and Systematic Risk.

JFJoseph E. FinnertyLeiden University RFRick N. FitzsimmonsMassachusetts College of Liberal Arts TOThomas W. OliverUniversity of Massachusetts Amherst

Key Points

The aim is to determine if leasing practices affected the systematic risk of companies following regulatory changes.
Analyzed three groups of companies based on leasing intensity: high-leasing, low-leasing, and random sample.
Matched leasing and non-leasing companies by Standard Industrial Classification (SIC) code.
Compared systematic risk before and after significant regulatory dates in 1973 and 1975.
No significant change in systematic risk pre- and post-June 1973 in any group.
No significant change in systematic risk pre- and post-August 1975 in any group.
Concludes that ASR 147 and SFAS 13 had little impact on market perceptions of systematic risk.

Abstract

Abstract ABSTRACT: This study investigates whether the market-determined systematic risk of the companies that used leasing extensively was affected by ASR 147, the FASB's August, 1977, exposure draft on lessee accounting, and SFAS 13. Three samples of companies were used in the study: (1) companies which engaged in a lot of leasing, (2) companies which did very little leasing, and (3) a random sample of companies. The leasing sample and the non-leasing sample were matched by Standard Industrial Classification (SIC) code. There was no significant change in the systematic risk of the sample companies pre- and post-June, 1973. There was no significant change in the systematic risk of the three groups of companies pre- and post-August, 1975. This leads to the conclusion that the SEC's ASR 147 and the FASB's pronouncement had little effect on the market's assessment of systematic risk.

Demander à l'IA

Bookmark

View Full Paper