The  effects of listing status on a firm’s lease accounting: Evidence from South Korea

Younghee  Park; Kyunga  Na

Younghee Park Keimyung University
Kyunga Na Keimyung University

Keywords: lease accounting, Korea

Abstract

This study examines how the listing status affects a firm’s choice of lease accounting, using 7,023 firm-year observations that record either an operating or a capital lease from 2001 to 2013 in Korea. We find that unlisted firms are more likely to opt for operating leases, and to have a higher ratio of operating leases than listed firms are. These results indicate that unlisted firms tend to prefer operating leases which can be used as a tool to avoid increasing debt levels and to benefit from off-balance sheet financing (or unrecorded liabilities), compared to listed firms. This study contributes to the current accounting literature as it is the first to provide empirical evidence regarding the impact of the listing status on a firm’s lease accounting.

Author Biographies

Younghee Park, Keimyung University

Lecturer, Keimyung University, Daegu, Korea. She earned her Ph.D. (2016) PhD in Accounting, Keimyung University, Daegu, Korea; her MBA (2014) Master in Accounting, Keimyung University, Daegu, Korea. Her interest research are Financial Analysts Forecasting, Value Relevance, Accounting Standards. She has published articles at Korea International Accounting Review 55 (2014), Journal of the Korean Data Analysis Society 16 (4) (2014), and Accounting Information Review 19, (2016).

Author contact detail: Accounting Department, School of Business, Seongseo Campus, Keimyung University, Dalgubeol Daero 1095, Dalseo-Ku, Daegu, 42601, Republic of Korea; phone: (010) 7597-0626; e-mail: younghee1110@nate.com.

Kyunga Na, Keimyung University

Author Scopus ID: 57189234383

Assistant Professor, Keimyung University, Daegu, Korea. She earned her Ph.D. (2013) in Accounting, University of Alberta, Edmonton, Canada; her MBA (2004), Judge Business School, University of Cambridge, United Kingdom; and her MSc (1999) in Finance, ISMA, University of Reading, United Kingdom. Her researches interset are Earnings Management, Stock Market Response, Auditor Changes, Financial Statement, Comparability, Tax avoidance. She has articles published at 14 international journal.

Author contact detail: 327, Euiyang Building, Accounting Department, School of Business, Seongseo Campus, Keimyung University, Dalgubeol Daero 1095, Dalseo-Ku, Daegu, 42601, Republic of Korea; phone: (010) 3339-3463; e-mail: kyunga.smu@gmail.com.

References

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