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Comment letter activity: A response to proposed changes in lease accounting

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  • Comiran, Fernando
  • Graham, Carol M.

Abstract

This study examines the motivations that lead some firms to lobby, via comment letters, against the changes in accounting for leases proposed by FASB/IASB. There are at least three distinct motivations for a company to lobby against the proposed changes: a high perceived cost of implementation/operation, a belief that the changes will increase the cost of capital, and a desire on the part of management to avoid any administrative burden associated with the changes. Our research suggests that companies that engage in lobbying are concerned with the costs of such changes (renegotiation of debt covenants, auditor fees, change in IT systems, etc.), but they also seem to be motivated by their accounting manager's desire to avoid any additional effort that the changes will require.

Suggested Citation

  • Comiran, Fernando & Graham, Carol M., 2016. "Comment letter activity: A response to proposed changes in lease accounting," Research in Accounting Regulation, Elsevier, vol. 28(2), pages 109-117.
    • Handle: RePEc:eee:reacre:v:28:y:2016:i:2:p:109-117
    DOI: 10.1016/j.racreg.2016.09.010
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    References listed on IDEAS

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    Cited by:

    1. Ma, Mark (Shuai) & Thomas, Wayne B., 2023. "Economic consequences of operating lease recognition," Journal of Accounting and Economics, Elsevier, vol. 75(2).
    2. Rey, Andrea & Maglio, Roberto & Rapone, Valerio, 2020. "Lobbying during IASB and FASB convergence due processes: Evidence from the IFRS 16 project on leases," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 41(C).

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    Keywords

    Leases; Comment letters; FASB;
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