IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

The Financial Impact of the Proposed Amendments to IAS 17: Evidence from Belgium and the Netherlands

Listed author(s):
  • Deborah BRANSWIJCK


  • Stefanie LONGUEVILLE

    (Ghent University College, Belgium)

  • Patricia EVERAERT

    (Ghent University, Belgium)

Registered author(s):

    Prior literature examined the financial impact of capitalizing operating leases by using the constructive lease capitalization method of Imhoff et al. (1991). The empirical evidence of these studies results in the perception that operating leases lead to off-balance financing, improvements of financial ratios and earnings enhancement in the U.K. (e.g. Beattie et al., 1998) and in the U.S.(e.g. Ely, 1995). Therefore, the IASB published in 2010 the exposure draft for the new standard on lease accounting (IAS 17). The most striking change is the elimination of the difference between finance and operating lease. Our study investigates the impact of the proposed adaptation for listed companies in Belgium and the Netherlands for 2008. Our results indicate that debt to equity ratio, return on assets and the current ratio are significantly affected by capitalizing operating leases. Furthermore, the results show that the impact on financial ratios differs among industries.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies in its journal Journal of Accounting and Management Information Systems.

    Volume (Year): 10 (2011)
    Issue (Month): 2 (June)
    Pages: 275-294

    in new window

    Handle: RePEc:ami:journl:v:10:y:2011:i:2:p:275-294
    Contact details of provider:

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Mike Adams & Philip Hardwick, 1998. "Determinants of the leasing decision in United Kingdom listed companies," Applied Financial Economics, Taylor & Francis Journals, vol. 8(5), pages 487-494.
    2. Sharpe, Steven A. & Nguyen, Hien H., 1995. "Capital market imperfections and the incentive to lease," Journal of Financial Economics, Elsevier, vol. 39(2-3), pages 271-294.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ami:journl:v:10:y:2011:i:2:p:275-294. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Cristina Tartavulea)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.