|Baumann, Jørgen Kristoffer
|Hegrestad, Thor Gunnar
|Masteroppgave(MSc) in Master of Science in Business, Finance - Handelshøyskolen BI, 2020
|The objective of this paper is to determine the impact of IFRS 16 (the new
accounting standard for leases) on both selected financial ratios and on the use of
lease financing. The analysis is performed using data disclosed in annual reports
for the 66 firms listed on the Oslo Stock Exchange Benchmark Index. The
constructive capitalization method is applied to capitalize the operating leases.
The capitalization leads to an increase in both assets and liabilities recognized on
the balance sheet. The analysis finds that financial ratios are impacted when
capitalizing operating leases, most significantly so, Debt/Assets and Debt/Equity.
Finally, no significant decreases in lease financing are found from 2015 to 2019.
|The effect of IFRS 16 on key financial ratios and financing decisions