THE IMPACT OF NEW LEASE STANDARDS UNDER US GAAP AND IFRS ON FINANCIAL RATIOS

Umapathy Ananthanarayanan, Peter Harris and Steve Shapiro

Review of Business and Finance Studies, 2020, vol. 11, issue 1, 13-28

Abstract: Most of the world financial market economies have adopted International Reporting Standards (IFRS) as the necessary framework for financial statements. In the United States, Generally Accepted Accounting Principles (GAAP) is still required, but the adoption of IFRS has the support of many accounting firms and professional organizations and is under consideration by the SEC. The revised lease guidelines under GAAP and IFRS shows a similar effect on the financial ratios and eliminate off-balance sheet financing. This case study illustrates the differences in the treatment of leases and the impact of these differences on financial statements and selected financial ratios after the year 2019. In a given situation, students use GAAP financial statements and prepare an IFRS based balance sheet, cash flow statement, and income statement. It is necessary to understand both the revised GAAP and IFRS rules regarding leases to address our case study. Our case study is designed to be used at undergraduate and graduate levels and courses like Intermediate Accounting, Accounting Theory, Analysis of Financial Statements. The instructor/s can offer our case study as an individual case study or as a group project

Keywords: US GAAP; IFRS; Right-of-use Asset; Capital Lease; Operating Lease Financial Ratios (search for similar items in EconPapers)
JEL-codes: M4 M41 M42 M48 M49 (search for similar items in EconPapers)
Date: 2020
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.theibfr2.com/RePEc/ibf/rbfstu/rbfs-v11n1-2020/RBFS-V11N1-2020-2.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibf:rbfstu:v:11:y:2020:i:1:p:13-28

Access Statistics for this article

Review of Business and Finance Studies is currently edited by Terrance Jalbert

More articles in Review of Business and Finance Studies from The Institute for Business and Finance Research
Bibliographic data for series maintained by Mercedes Jalbert ( this e-mail address is bad, please contact ).