Search results for "IFRS 16"
showing 3 items of 3 documents
The Value Relevance of Operating Lease Liabilities: Economic Effects of IFRS 16
2018
The new IASB and FASB models for leases aim to improve the quality of financial reporting. To this end, both standard setters impose the recognition of assets and liabilities for operating leases. Meanwhile, preparers have been strongly lobbying against these changes, as in their view the new treatment will lead to negative economic consequences. We undertake a value‐relevance study to examine whether as‐if capitalised operating leases are priced by market users in a relatively unexplored setting. We consider Spanish listed firms, and employ hand‐collected data on operating leases disclosed in the notes to the financial statements to constructively capitalise the assets and liabilities. Our…
Assessing the impact of operating lease capitalization with dynamic Monte Carlo simulation
2019
Abstract The European Commission has recently adopted a new accounting standard for leases that will be implemented in 2019, which requires operating lease contracts to be included in the balance sheet, affecting key ratios, leverage and profitability. We simulate the impact of IFRS 16 using Monte Carlo method, which incorporates the uncertainty of the future value of variables when making predictions. Unlike prior studies based on historical data, our study considers a five-year forecast horizon and, more importantly, contemplates several probable scenarios. Based on the STOXX All Europe 100, our results confirm that, in 2019, liability maturity, liquidity and return on assets will decreas…
La capitalización de los arrendamientos operativos: Análisis del impacto en las empresas del IBEX 35
2018
Purpose: This paper analyzes the consequences of the change in the accounting rules about operating leases in the companies and users of financial information. Design/methodology: We use the constructive capitalization method to estimate the liabilities and leased assets and perform an ex ante analysis of the regulatory impact in the IBEX 35 non-financial companies. Non-parametric tests are employed to examine the effect on certain ratios, and through a multivariate regression we investigate the business characteristics that explain the variation of EBITDA. Findings: The ratios under study are significantly affected by the capitalization of operating leases. The explanatory analysis shows t…