Abstract

This research empirically examines whether the recent Securities and Exchange Commission (SEC) decision calling for disclosure of capitalized accounting data for noncapitalized financing leases had any impact on the pricing of securities. The results of this research may be relevant in evaluating the lease disclosure requirements set forth by the Financial Accounting Standards Board, as well as by the SEC. In June 1973, the SEC proposed to amend Rule 3-16' of Regulation S-X calling for improved disclosure of lease information by lessees in their 10-K reports filed with the SEC.2 After evaluating many letters of comment received in response to the proposal, the SEC eventually adopted the extended lease disclosure requirements in Accounting Series Release (ASR) No. 147 in October 1973.3 The Release was effective as of November 30, 1973.

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