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Economic consequences of the new accounting standards on leases

Grant number: 21/11533-6
Support Opportunities:Regular Research Grants
Duration: August 01, 2022 - July 31, 2024
Field of knowledge:Applied Social Sciences - Administration - Accounting
Principal Investigator:Raquel Wille Sarquis
Grantee:Raquel Wille Sarquis
Host Institution: Faculdade de Economia, Administração, Contabilidade e Atuária (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil
Associated researchers:Ariovaldo dos Santos ; Isabel Maria Estima Costa Lourenço ; Verônica de Fátima Santana


This research project aims to analyze the economic consequences of the new international and American accounting standards on leases (IFRS 16 and US Topic 842), which became mandatory for annual reporting periods beginning on or after 1 January 2019. These new accounting standards introduced a great change in the accounting model applied by lessees, given that they require lessees to capitalize the leases previously classified as operating leases and treated as period expenses. The purpose of this research is to evaluate the impacts of these new accounting standards on the accounting amounts reported in the firms' financial statements, on the comparability of accounting information, and on information asymmetry. The empirical analysis will rely on a comprehensive and worldwide sample composed by 5,454 firms from 74 countries. We will start by presenting a thoroughly descriptive analysis about our sample firms' lease contracts and how the change in these contracts accounting procedures affected firms' financial statements for the 2019, 2020 and 2021 periods. Secondly, we will measure the comparability of accounting information before and after the adoption of these new accounting standards, using a Comparability measure based on the procedure developed by De Franco, Kothari, and Verdi (2011) and Barth, Landsman, Lang, and Williams (2012). Finally, we will analyze the effect of this change on information asymmetry among investors, measure as bid-ask spreads. We expect this research to generate important findings for the academic literature on leasing accounting, accounting choice, comparability of accounting information, and information asymmetry. Our finding will be also helpful for the IASB and the FASB, during the Post-Implementation Review (PIR) of IFRS 16 and Topic 842. (AU)

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