Of Earnings Management And Internal Operating Lease Table

Operation leases (OP) is one of the most common way of off-balance financing. Prior researches show that existing lease accounting does not meet users’need. Therefore, The International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) recently issued a joint exposure draft on accounting for leases. This exposure draft seeks to shift lease accounting from an "ownership" model to a "right-to-use" model. At the same time, a large amount of lease covenants exited in our country, and some companies didn’t disclose the relative information accordingly. Besides that, our country is being making international convergency with IASB. So, it’s necessary to discuss about the effect of the construction capitalization of OP.We investigate the effect of the construction capitalization of OP from the aspect of leasee. This paper has five sections. Section one gives an introduction of background and significance, and then propose research idea and methods according to the related literature. At last, some research innovation points and deficiencies are given. The next section involves some related concept definitions and theoretical basis, and gives theoretical analyses about the effect of the construction capitalization of OP. Section three introduce the framework about empirical research, especially about the source of data and the processes to deal with the data. Section four shows and analyze the results of the empirical research. Besides summarizing the research, we give some related suggestions for the problems in section five.The results imply that the ROE will decrease and the NE and LEV will increase at first after construction capitalization, and later it will appear the advert changes. Also, the D/E will increase all the time. All of above mean that OP is a kind of accrual management under the current OP accounting standard.The main innovation of this paper lies in:(1) prior researchers always do their studies in a special time. However, their conclusions are contradict sometimes. To solve this question, we will do the research from the whole lease term.(2)prior relative researches are done by the foreigner researchers using foreign data. And this paper will exam the effect of the construction capitalization of OP combining the fact of OP in China.