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Does Transition to IFRS 16 Affect Companies Financial Performance: The Case of Baltic Listed Companies

Author

Listed:
  • Legenzova Renata

    (1 PhD, professor at the Faculty of Economics and Management, Vytautas Magnus University, Lithuania .)

  • Žilaitytė Liveta

    (2 Financial project controller at Nokia, Lithuania .)

Abstract

The paper assesses the effect of transitioning to IFRS 16 on Baltic listed companies’ financial performance. The results revealed that 74.63% of sample companies were affected with an average 8.68% increase in total assets and 13.03% increase in total liabilities. Return on assets and assets turnover ratios of the affected companies decreased by an average of 8.33%, the quick ratio and current ratio decreased by 7.84%, while the debt-to-equity ratio increased by 28.63%. The sectors most heavily impacted by transitioning to IFRS 16 were communication services and basic materials sectors.

Suggested Citation

  • Legenzova Renata & Žilaitytė Liveta, 2023. "Does Transition to IFRS 16 Affect Companies Financial Performance: The Case of Baltic Listed Companies," Management of Organizations: Systematic Research, Sciendo, vol. 89(1), pages 67-86, June.
    • Handle: RePEc:vrs:morgsr:v:89:y:2023:i:1:p:67-86:n:4
    DOI: 10.2478/mosr-2023-0005
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    References listed on IDEAS

    as
    1. Francesca Magli & Alberto Nobolo & Matteo Ogliari, 2018. "The Effects on Financial Leverage and Performance: The IFRS 16," International Business Research, Canadian Center of Science and Education, vol. 11(8), pages 76-89, August.
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