THE IMPACT OF LEASE ACCOUNTING UNDER IFRS 16 ON COMPANIES' FINANCIAL INDICATORS: AN ANALYSIS OF INTERNATIONAL PRACTICES

Abstract

This article examines the impact of the application of the International Financial Reporting Standard IFRS 16 on companies’ financial indicators and analyzes how the presentation of leases in financial statements has changed compared with the previously applied IAS 17 standard. The introduction of IFRS 16 significantly changed lease accounting principles, as lessees are now required to recognize most lease contracts on the balance sheet as assets and liabilities. The aim of the study is to determine how the application of IFRS 16 in international practice affects the financial indicators of international companies. The research is based on scientific literature analysis, comparison, and the analysis of selected companies’ financial data. Three selected cases are analyzed, covering the Baltic countries, Poland, and South Africa, in order to evaluate the impact of the standard in different geographical and industry contexts. The results of the study show that the application of IFRS 16 generally increases the value of companies’ assets and liabilities, increases financial leverage, and may affect indicators such as ROA, liquidity ratios, and EBITDA. It was also found that the extent of the standard’s impact largely depends on the intensity of lease usage within specific sectors.