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The Pre-Convergence Effect of Global Standard: Proactive Managerial Response to IFRS 16 by Japanese GAAP Firms

Kiyonori Iwata

Journal of International Accounting Research2026https://doi.org/10.2308/jiar-2025-032article
AJG 2ABDC A
Weight
0.50

Abstract

This study examines whether global accounting standards influence firms using local Generally Accepted Accounting Principles (GAAP) before formal convergence. In Japan, where standard setters publicly commit to substantive convergence with International Financial Reporting Standards (IFRS), the release of a new IFRS provides a credible signal of future changes to local GAAP. I exploit the issuance of IFRS 16 and show that Japanese local GAAP firms with high operating lease exposure began reducing operating lease use and the lease-to-buy ratio following IFRS 16 issuance, whereas capital investment also declined. These patterns indicate that managers anticipated the future capitalization of operating leases under JGAAP and proactively adjusted to mitigate expected balance-sheet shocks. The anticipatory response is stronger for managers with longer decision horizons. Overall, the findings document a clear pre-convergence effect: global standards can reshape real decisions by local GAAP firms even before the issuance of the corresponding revised local standard. Data Availability: Access to the data is subject to a license agreement and is not publicly available. JEL Classifications: M41; G30.

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https://doi.org/https://doi.org/10.2308/jiar-2025-032

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@article{kiyonori2026,
  title        = {{The Pre-Convergence Effect of Global Standard: Proactive Managerial Response to IFRS 16 by Japanese GAAP Firms}},
  author       = {Kiyonori Iwata},
  journal      = {Journal of International Accounting Research},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.2308/jiar-2025-032},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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