engleski

The Influence of Changes in the Notes on Evaluation of Indebtedness and Other Performance Measures – The Analysis of Lease Financing

Notes to financial statements, along with other annual financial statements, are an important source of information for financial statements users, especially for shareholders and creditors. Notes provide more detailed information about elements of financial statements. In this paper, special attention was given to the notes regarding operating leases. In 2016, the International Accounting Standards Board issued a new accounting standard on leases - IFRS 16. The Standard is effective for annual periods beginning on or after 1 January 2019 and changes the presentation of operating leases in the lessee’s financial statements in relation to former accounting standard - IAS 17. The most significant change introduced by the new standard is the presentation of right-of-use assets and related long-term liabilities derived from operating leases in the balance sheet of the lessee. Additional disclosure requirements were also introduced in notes to financial statements. The IASB emphasizes in its publications that the changes in accounting treatment of operating leases will have the greatest impact on financial statements of companies in the airline, retail, tourism and transportation industry sector. The theoretical background of the changes in the Standard has been investigated in the paper. Other than that, the paper analyses the financial statements of several companies from the airline industry sector. Further, in order to assess the impact of new Standard’s requirements on the financial position and business performance a model has been developed. Research results indicate that the presentation changes regarding operating lease will contribute to a better assessment of lessee’s financial liabilities and its financial position. The changes will also affect ROA and EBITDA of the lessee.

leases, notes, debt ratios, ROA, EBITDA

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