@article{f9e6cd73b7f741f89749ed2183d4b821,
title = "The debate on rented assets capitalization: The economic impact on family firms",
abstract = "International accounting regulators wish to include {"}rented{"} assets and future payment commitments on their balance sheets. This article shows how such a proposal would affect family enterprises. Because the literature on family firms suggests that they have particular finance structures and tend to avoid excessive debt levels, a significant effect is expected. We build on the capitalization method and look for consequences on firms' business analyses. Additionally, we run a regression analysis to determine the {"}family nature{"} effect. The results show that family firms would be significantly affected, particularly with respect to leverage. When sector is considered, the retail sector is the most affected.",
keywords = "Business analysis, Family firms, Leverage, Operating lease, Renting",
author = "Fit{\'o}, \{M. {\`A}ngels\} and S. Moya and Neus Orgaz",
note = "Funding Information: We selected all of the quoted Spanish firms (by consulting consolidated financial statements), excluding those following different regulations, between 2008 and 2010. In Spain, only quoted companies use IFRS and would be affected by the new lease regulation. Unlisted companies must report under the new Spanish GAAP adapted to IFRS, which was published at the end of 2007 and came into force on January 1, 2008. Our initial plan was to gather information for all quoted Spanish companies for the 2005–2010 period and examine the period since IFRS{\textquoteright} implementation. However, disclosures on operating leases are scarce, and including those years would have made our sample too small for proper analysis. Thus, we decided to work with the 2008–2010 period, allowing us to keep the maximum number of companies. For each year, we worked with an initial population of 112 companies. We manually analyzed their account notes to extract information on future minimum lease payments. Although the disclosure of leasing information is compulsory, only 52 companies disclosed the minimum information required for our analysis. Thus, our final sample comprises 156 yearly observations. It is difficult to find a consensus in the literature about what constitutes a family firm. We define the concept in terms of control, a procedure used by many studies, such as Miller, Le Breton-Miller, Lester, and Cannella (2007) , which includes a list of the definitions of “family firm” used since 1999. Using a binary variable, we considered as a “family firm” any business with a shareholder (single or family) who owns more than 25\% of the total voting rights and for which the family is the largest owner. The 25\% criterion has been used by, among others, The European Group of Owner Managed and Family Enterprises (GEEF) for quoted companies and has been adopted by the Spanish Instituto de la empresa familiar (IEF), the European Commission and the family firm experts appointed by the national authorities under the Multiannual Program for Enterprise and Entrepreneurship coordinated by the European Commission's Directorate-General for Enterprise and Industry. 6 6 This definition represents the consensus of the expert group, which recommended it be used by member states and other countries covered by the project to produce quantitative (and, at the European level, comparable) information on the family firms sector. We identified 21 family firms by applying this criterion to the sample of 52 companies that disclosed lease information. The operating lease information disclosed by Spanish companies in a note appended to their financial statements is a schedule of operating lease payments that discloses payments due one year after reporting, two to five years after reporting and after five years after reporting. We also collected accounting numbers and other information, such as the company-specific weighted interest rate for the recognized debt and the effective tax rate. 3.2 ",
year = "2013",
month = dec,
doi = "10.1016/j.jfbs.2013.10.001",
language = "English",
volume = "4",
pages = "260--269",
journal = "Journal of Family Business Strategy",
issn = "1877-8585",
publisher = "Elsevier Ltd.",
number = "4",
}