The impact of IFRS 16 on the financial position of selected companies from the WIG30 index

Abstract

The main purpose of this article is to analyze the impact of changes in accounting for leases, defined in IFRS 16, on the financial situation of selected Polish entities listed on the Warsaw Stock Exchange. The following qualitative research methods were used to accomplish the goal: analysis of the literature of the subject and analysis of international reporting standards regarding accounting for leases. In the empirical part of the article, a simulation was carried out. It analyzed the impact of capitalization of operating lease on the selected parts of the balance sheet and changes in profitability of four entities listed on the Warsaw Stock Exchange. The results of empirical research indicate an increase in the value of assets and liabili- ties, a decline in the financial results, and an increase in profitability and debt ratios. The largest changes pertained to the equity and asset debt ratio, which confirms that the application of IFRS 16 will show corporate indebtedness, thus increasing investors' knowledge of the actual risk with which the company is burdened. The main value of this article is the originality of the pilot study carried out. To the best of the authors’ knowledge, these are the first practical measurements of the impact of capitalization of operating lease on the changes in profitability and indebtedness of the reporting entities.

Keywords

• IFRS 16
• IAS 17
• operating lease
• finance lease.