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Aspects of Some Changes Regarding the Application of IFRS 16

Author

Listed:
  • Cristina-Valeria Laslo

    („1st of December 1918†University of Alba Iulia)

Abstract

As of January 1, 2019, economic entities that use as the basis the international financial reporting standards (IFRS) must apply IFRS 16 for the accounting of leasing contracts. This standard brings major changes to the accounting of the leasing contracts to the lessee. IFRS 16 standard simplifies the IAS 17 standard in which both the financial and operational leasing were provided. The lease will be operated only financially, respectively in the financial situation of the lessee. This standard has the following consequences: the value of the assets and liabilities will increase, the profit or loss will no longer be distributed linearly, which leads to the depreciation of the right of use and the financial cost depending on the payment conditions, the duration of the contract and of course, the depreciation method. of the right to use the asset, exemplified by the study carried out at an economic entity. This change has a significant impact because the market value of the invested capital will increase.

Suggested Citation

  • Cristina-Valeria Laslo, 2019. "Aspects of Some Changes Regarding the Application of IFRS 16," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 783-788, December.
    • Handle: RePEc:ovi:oviste:v:xix:y:2019:i:2:p:783-788
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    More about this item

    Keywords

    leasing contract; financial situation; financial leasing; loan value;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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