新租赁会计准则对零售业盈利能力分析的影响外文翻译资料

题

目

The Effect of the New Lease Accounting Rules on Profitability Analysis in the Retail Industry

刊名

The Journal of Corporate Accounting amp; Finance

来源数据库

JOURNAL: The Journal of Corporate Accounting amp; Finance

YEAR:2016

PAGES:19-31

First published: 18 October 2016 | https://doi.org/10.1002/jcaf.22206

原始语种摘要

US accounting principles will soon require companies to capitalize operating leases with terms longer than 12 months. The new rules will have a dramatic effect on the reported amounts of assets and liabilities for companies with significant lease commitments. These changes will also impact common profitability measures that use assets as a base to gauge earnings performance. We explore the implications of the new lease rules on the EBIT/Assets ratio, a measure of operating return on assets. We examine 50 firms with the largest operating lease commitments and find that 22 retail and restaurant companies are most affected, as their average ratio declines by over 400 basis points from 15 percent to 11 percent based on a hypothetical discount rate of 6% and a lease term of 10 years. A more comprehensive analysis on a larger group of retailers and restaurants provides additional evidence on just how significantly the new lease rules will impact this ratio. Our findings highlight the importance of understanding the implications of the new lease rules on common methods of financial analysis, particularly when considering those industries that rely heavily on fixed assets like restaurants and retailers. copy; 2016 Wiley Periodicals, Inc.

关键词

Keywords: New Lease Accounting Rules, capitalize operating leases, Profitability Analysis, methods of financial analysis

原始语种正文

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INTRODUCTION

On February 25, 2016, the Financial Accounting Standards Board (FASB) completed its leases project by issuing Accounting Standards Update No. 2016‐02, Leases (Accounting Standards Codification Topic 842). For public companies and entities that issue publicly traded securities, the new standard is effective for periods beginning after December 15, 2018. For calendar‐year companies, the first year would be the 2019 fiscal year. For private companies, the effective date is one year later (FASB, 2016a ).

The new lease standards affect what are currently known as operating leases, not the existing capital leases, which the standards refer to as “finance” leases, and apply to all assets leased for a term greater than 12 months. Under current accounting standards, operating leases do not appear on the balance sheet. However, under the new leasing standards, operating leases would be capitalized and appear as assets (and liabilities) on the balance sheet, much like the current treatment of capitalized (finance) leases. The new operating lease rules call for a single lease expense to be recorded on the income statement, equal to the total lease cost allocated on a straight‐line basis over the lease term. In each period, the lease liability decreases based on the lease payment less the implied interest on the liability balance. There will also be a corresponding decrease in the lease asset (referred to as the “right of use asset”). Thus, the income statement recognition under the new rules is similar to the current generally accepted accounting principles (GAAP) operating lease reporting requirements. It is clear that the primary purpose of the new rules is to create more consistency in the balance sheet presentation of leased assets and liabilities, regardless of whether the transaction meets the finance or operating lease definition.

In the words of the FASB (2016b, ASU 2016‐02, p. 2):

How Do the Main Provisions Differ from Current Generally Accepted Accounting Principles (GAAP) and Why Are They an Improvement?

The main difference between previous GAAP and Topic 842 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP.

In this article, we bring into focus the effects of the lease changes on profitability ratios for capital‐intensive firms with high operating leases. Specifically, we focus on the earnings before interest and taxes (EBIT)/Assets profitability ratio, a measure of operating return on assets (ROA). The new lease accounting rules should not have a material impact on the numerator but may have a drastic effect on the denominator as additional fixed assets are included on the balance sheet. More specifically, the ratio may be separated into two components as EBIT/Assetsthinsp;=thinsp;EBIT/Sales times; Sales/Assets, with the first component capturing an operating profit margin and the second component measuring asset turnover. The EBIT profit margin will remain relatively unchanged as a result of the new lease standard, but as operating leases are capitalized on the balance sheet, asset turnover will decrease. Firms will thus appear less efficient with their asset base under the new rules. This, of course, is an accounting fiction, as the firms actual economic efficiency will not change, but the performance measures will include new information about firm resources now disclosed on the balance sheet rather than the footnotes. These rules will have a particularly strong impact on the retail industry where businesses lease much of their store space. It will therefore behoove affected companies to work with their banks, other capi

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