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Product as a service (PaaS) is a method of business innovation for traditional product companies to make their offerings more attractive, move up the value chain and find more customers. However, the customer acceptance of PaaS depends on the market in which it operates. The purpose of this study is to understand, through an automotive lease PaaS evaluation and from an outside-in user perspective, the effects of the main intrinsic and extrinsic factors of a product, its design and brand, on the lease versus buy decision of automobiles by consumers in an emerging market, to help companies transition to a PaaS business model.

A survey of actual car owners and lease car users was conducted. Confirmatory factor analysis was used to test the measurement model, followed by logistic regression for statistical modeling. As a practice evaluation of an existing PaaS example, this study further explored the expectations and experience of automotive lease users to link practical insights to analytical results and help businesses make a successful transition to PaaS.

The results of the study showed the effect of the brand as significant in lease versus buy decisions. Brand loyalty is more important when leasing than when buying a car. However, brand awareness/association is less important for leasing than buying. There was no significant difference in consumer expectations of product design in automotive lease PaaS. Customers who buy and lease cars have the same expectations of the overall product in terms of its key design attributes.

The literature on PaaS has mostly focused on strategies, frameworks and guidelines for implementation and empirical studies are limited. Comparative analyses between PaaS and traditional ownership models are also limited. It is unclear how consumers’ expectations differ between PaaS and traditional ownership models, especially in emerging markets, because PaaS’s success depends on the market in which it operates. This study addresses this gap in the literature.

New lease accounting rules are proposed that will fundamentally change the way leases are accounted for and reported in financial statements. This paper seeks to provide information on the proposed new rules and to illustrate their impact on financial statements and financial ratios using a single restaurant company.

The case of a single restaurant company, CEC International, is used to illustrate the potential impact of the new rules. Additional examples are used to illustrate the impact on financial policies. Financial statements were adjusted and various financial ratios such as interest coverage, leverage and profitability ratios were computed before and after capitalization.

The results show that financial statements presented will change dramatically when lease assets and liabilities are added to the balance‐sheet. The expense recognition pattern will change significantly and negatively impact performance measures such as interest coverage and capital ratios but improve cash flow measures such as EBIT and EBITDA.

Limitations of this study include the assumptions used to capitalize leases such as interest rate, life of leases, no new leases, and exclusion of contingent rentals.

All restaurant companies and managers must assess the costs and benefits of complying with the proposed new rules and start analyzing and evaluating their impact on existing debt agreements, executive compensation plans, and the lease versus buy decision.

This paper serves to inform restaurant managers about the potential implications of the new rules, so managers can prepare, plan and formulate strategies to mitigate their impact.

Examines the lease vs. buy decision for investments in technology. Addresses pivotal investment decision issues such as varying the length of the lease, the useful life of the equipment, and alignment with the company's overall financial strategy. The scenario is for a real financial services firm that has been disguised for confidentiality reasons. Presents an investment decision: should a company buy or lease technology with a relatively short useful life? The new controller at AMG, a Fortune 500 financial services firm, has been tasked with determining how to finance the acquisition of 7,542 new PCs to be rolled out over the next 12 months. This is a $6.7 million investment decision and the rollout schedule adds significant complexity to the solution. The controller must choose between buying or leasing the computers over 24- or 36-month time frames. Provides a framework for analyzing similar investment decisions. The key learning point is that leasing information technology can be cheaper than buying. This is contradictory to a car lease, which may be familiar from everyday experience. A new car has a potentially long useful life and can retain significant value after several years, hence, intuition is that buying should always be cheaper than leasing. Shows that this is not the case for information technology. Teaches the correct application of the mid-quarter convention within MACRS depreciation for technology, and the implications of operating vs. capital leases and off-balance-sheet financing. In the process, introduces the four tests for a capital lease. Finally, shows how creative analysis techniques can be used to simplify complex decisions. These techniques aid in arriving at a conclusion faster and with less effort.

To illustrate the fundamentals of lease vs. buy decisions in technology and how they differ from the typical capital equipment lease vs. buy decision. Topics covered include MACRS depreciation and off-balance-sheet financing for a complex leasing scenario staggered in time across multiple business units.

The purpose of this paper is to present evidence on the significance of the strategic determinants of the lease versus buy (LVB) decision for corporate real estate (CRE) in the UK.

This paper takes an empirical approach using logistic regression technique to explore company and site characteristics for LVB decision for CRE based on a survey involving 2,248 UK firms.

The results show significance for locational characteristics, size of operations, and physical attributes of the real estate; company size, however, was less significant than supposed, while company preferences came through strongly; sectoral differences were negligible.

The dataset used in this study is based on a 1998 survey of 2,248 property occupiers in the UK. Although the sample size is large, the LVB decision was only a part of the survey.

This paper demonstrates the necessity for a wider framework to fully analyze the LVB decision for CRE, which not only includes finance, but also corporate strategy, locational analysis, and real estate economics.

This paper makes an empirical contribution to the field of CRE research by presenting evidence on the significance of the strategic determinants of the LVB decision for CRE in the UK.

This research study explores the growing phenomenon of consumption without ownership by addressing individuals’ motivations for leasing, rather than financing, products. A two‐phase study was conducted in the retail automotive industry in order to ascertain motives for consumer leasing. It was found that while all hypothesized motives were predictors of the lease/finance decision (including desire for gratification and desire for social approval), two variables – desire for variety and desire for simplified maintenance – emerged as the best predictors of whether an individual chooses to lease or finance his/her motor vehicle. Implications for marketers and academicians are discussed.

Until recently, occupiers have ignored the financial benefits real estate can add to the value of their firms. Corporate real estate (CRE) is now on the corporate agenda and CRE executives are being challenged by shareholders and senior management to employ best practice techniques to unlock the hidden value in the firm’s real estate portfolio. This paper offers a practical decision framework to allow this to happen and explores the potential for them and for real estate investors to capture this value. The paper is based on the author’s experience of advising occupiers and investors and his increasing knowledge of corporate finance principles.

In the late 1990s, the National Railroad Passenger Corporation (Amtrak) faced a rude awakening as Congress stipulated that it eliminate its reliance on federal subsidies by 2002. In response, Amtrak drew up a plan for self-sufficiency, the centerpiece of which was a new high-speed passenger service that, it was hoped, would boost revenue enough to make Amtrak self-sufficient by 2002. To run this new service, Amtrak needed to purchase $750 million worth of new locomotives and train sets in 1999. Three alternatives were available for funding the purchase: debt financing, lease financing, or reliance on federal sources. The case opens with Amtrak's CFO instructing her staff in April 1999 to review a leveraged-lease proposal that has just been submitted by BNY Capital Funding LLC. The objectives of the case are to introduce students to financial leases as a financing alternative, explore the lease-versus-buy decision and the conditions under which financial lease arrangements make sense, and exercise skills in the valuation of financial leases.

The purpose of this paper is to investigate what impact International Financial Reporting Standards (IFRS) lease accounting changes might have on corporate real estate (CRE) strategies, and what the consequences for future corporate real estate portfolio decisions might be.

A macro-analysis based on the constructive capitalization method of Imhoff et al. (1991) is used to determine the potential impact of IFRS lease accounting changes on Amsterdam Exchange Index (AEX) listed corporations. In addition, a series of interviews were held with CRE executives to discuss this impact and with CRE and IFRS experts for general insight.

The impact of IFRS lease accounting seems less severe than expected. Notwithstanding, it could form a serious bottleneck for CRE departments that do not operate on a strategic level. Therefore, IFRS lease accounting changes might act as a catalyst for the professionalization of corporate real estate management departments.

The paper provides CRE managers with a manageable insight to alter CRE decision-making processes in relation to IFRS lease accounting. The sample size was too small to make a distinction between different industries.

Past research showed that accounting is a potential variable in CRE decision-making, but did not yet clarify the possible impact of IFRS lease accounting on CRE strategies and the relating CRE operating decisions. Besides that, this paper also provides insight for options to cope with the (possibly severe) implications.

The director of equipment finance at Burlington Northern Railroad Company must decide if a leveraged-lease proposal is acceptable. The case emphasizes the importance of the lessee's tax status to the value of the lease and how the perception of residual value affects the valuation for both the lessee and lessor. To value the lease properly, the student must identify the relevant cash flows and the appropriate discount rates for those flows.