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Reporting Lease Contracts According to IFRS 16: Case of Romanian Entities

Author

Listed:
  • Irina-Doina Pășcan

    (“George Emil Palade†University of Medicine)

  • Andreea ChindriÈ™

    (“George Emil Palade†University of Medicine)

Abstract

In 2016, a new accounting standard on leases was issued and it is effective since 2019. According to IFRS 16 “Leases†, the classification of lease contracts as finance or operating leases is eliminated; significant changes could emerge for the lessee. Our study examines the effect of the new accounting model for lease provided by IFRS 16 in case of Romanian entities listed on Bucharest Stock Exchange. We analyzed the financial statements prepared for 2019. The main objectives are to analyze the changes in the balance sheet and the profit or loss account subsequent to the application of IFRS 16 and to measure the conformity with the requirements of this standard. The results show that the new rules regarding lease accounting do not bring significant changes on the financial statements of the lessee. We also find that, on average, Romanian listed entities present a low level of compliance with IFRS 16.

Suggested Citation

  • Irina-Doina Pășcan & Andreea ChindriÈ™, 2020. "Reporting Lease Contracts According to IFRS 16: Case of Romanian Entities," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 1031-1038, December.
    • Handle: RePEc:ovi:oviste:v:xx:y:2020:i:2:p:1031-1038
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    References listed on IDEAS

    as
    1. Thomas Frecka, 2008. "Ethical Issues in Financial Reporting: Is Intentional Structuring of Lease Contracts to Avoid Capitalization Unethical?," Journal of Business Ethics, Springer, vol. 80(1), pages 45-59, June.
    2. Ema MASCA, 2015. "Conservative Accounting Practices Used by Companies Listed on Stock Exchanges in Romania," STUDIA UNIVERSITATIS PETRU MAIOR SERIES OECONOMICA, Petru Maior University, Faculty of Economics Law and Administrative Sciences, vol. 1, pages 79-108, December.
    3. Begoña Giner & Francisca Pardo, 2018. "The Value Relevance of Operating Lease Liabilities: Economic Effects of IFRS 16," Australian Accounting Review, CPA Australia, vol. 28(4), pages 496-511, December.
    4. Catalina Gorgan & Vasile Gorgan, 2014. "Study On Disclosure Level Of Companies Listed On The Bucharest Stock Exchange In Accordance With International Financial Reporting Standards: The Case Of Intangible Assets," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 104-115, April.
    5. Lavinia Minodora Takacs, 2012. "The Value Relevance Of Earnings In A Transition Economy: Evidence From Romanian Stock Market," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-8.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    IFRS 16 “Leases†; Romanian listed entities; Bucharest Stock Exchange (BSE); rightof-use asset; disclosure index;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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