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Appears in Collections:Accounting and Finance Journal Articles
Peer Review Status: Refereed
Title: Operating lease finance in the UK retail sector
Author(s): Goodacre, Alan
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Keywords: Leasing
operating leases
off-balance sheet finance
financial ratios
lease accounting
Issue Date: Jan-2003
Date Deposited: 11-Feb-2013
Citation: Goodacre A (2003) Operating lease finance in the UK retail sector. International Review of Retail, Distribution and Consumer Research, 13 (1), pp. 99-125.
Abstract: The paper documents the importance of leasing in the UK retail sector and estimates the potential balance sheet impact of new accounting proposals to bring all leases onto lessees’ balance sheets. Off-balance sheet operating leases are shown to be a major source of finance, and far more important (3.3 times higher) than on-balance sheet long-term debt; by contrast, finance leases are immaterial. Operating leased assets, the major part of which is ‘land and buildings’ (98%), represent a significant proportion (28%) of reported total assets. Capitalization of operating leases would have a major impact on nine key performance ratios and would alter the ranking of companies markedly. The findings suggest that operating leases need careful consideration in estimating retailers’ financial risk, in comparing cross-national performance and in research studies of capital structure decisions.
DOI Link: 10.1080/0959396032000065373
Rights: This is an Author's Accepted Manuscript of an article published in The International Review of Retail, Distribution and Consumer Research, Volume 13, Issue 1, 2003 , pp. 99-125, copyright Taylor & Francis, available online at:

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