IFRS 16: The news leases standard
Assessment of the impact of the new leases standard on the financial statements, key financial ratios and performance measures on a sample of 3,199 listed IFRS reporting organisations across a range of industries and countries (exl US)
The study identifies the minimum impact of capitalising the operating lease commitments as disclosed in the published financial statements for 2014. In view of organisations assessment of the lease term under the new standard, the inclusion of amongst others in-substance fixed payments and variable payments linked to an index or rate, the eventual impact may be much greater. Furthermore, the study takes no account of transitional reliefs that are available upon adoption of the new leases standard on 1 January 2019.
Highlights from the study include:
The impact of the new standard differs significantly between industries. The industries that are likely to experience the most significant impact on reported financial ratios and performance measures are: