The paper "Does New Lease Accounting Standard ASC 842 Affect Bank Loan Pricing" explores whether the new accounting standard, requiring firms to recognize operating lease liabilities on the balance sheet, increases borrowing costs. Inspired by an internal seminar, we investigated the impact of ASC 842 on firms' balance sheets and book leverage, focusing on whether it affects banks' perceptions of credit risk. Using data from DealScan and Compustat, we found that high-leasing firms face higher loan spreads post-implementation. Guided by Prof. Qiang Wu, Dr. Sunny Sun, and Dr. Colin Zeng, our research won the Best Paper Award at JIAR 2023.
Ms.LI Yani
Doctor of Philosophy
School of Accounting & Finance
Faculty of Business
Knowledge of ASC 842, which mandates the capitalization of operating leases on balance sheets, significantly altering firms' financial reporting and book leverage.
Understanding how changes in accounting standards affect financial metrics such as balance sheets, leverage ratios, and overall financial health of firms.
Insight into how banks evaluate the credit risk of firms, particularly how the recognition of operating lease liabilities influences borrowing costs and loan pricing.
Proficiency in using databases like DealScan and Compustat for data collection and employing techniques like staggered DID to analyze the impact of accounting standards on firms.
Experience in working with academic mentors and co-authors, leveraging their expertise to enhance research quality and gain recognition in academic conferences
Analyzing the impact of ASC 842 on financial metrics and bank loan pricing, identifying research gaps, and forming hypotheses based on observed financial changes.
Conducting thorough literature reviews, collecting data from reputable sources like DealScan and Compustat, and applying analytical techniques such as staggered DID to derive meaningful insights.
Working with experts like Prof. Qiang Wu, Dr. Sunny Sun, and Dr. Colin Zeng, leveraging their knowledge and feedback to enhance the research's depth and quality.
Improving academic writing, presenting research at international conferences, and effectively communicating complex ideas to diverse audiences.
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Accounting Standards and Regulations
Collaboration and Mentorship in Research
