The Impact of a New Accounting Standard on Assets, Liabilities and Leverage of Companies: Evidence from Energy Industry

Ireneusz Górowski, Bartosz Kurek and Marek Szarucki
Additional contact information
Ireneusz Górowski: Department of Accounting, Institute of Management, College of Management and Quality Sciences, Cracow University of Economics, Rakowicka 27, 31-510 Krakow, Poland
Bartosz Kurek: Department of Accounting, Institute of Management, College of Management and Quality Sciences, Cracow University of Economics, Rakowicka 27, 31-510 Krakow, Poland
Marek Szarucki: Department of Strategic Analysis, Institute of Management, College of Management and Quality Sciences, Cracow University of Economics, Rakowicka 27, 31-510 Krakow, Poland

Energies, 2022, vol. 15, issue 4, 1-15

Abstract: The climate policy of the EU enforced substantial changes for producers and suppliers of energy. New assets and providers of capital are needed to fulfill the policy requirements. To provide comparability and facilitate an investment process, EU law requires companies to prepare annual financial statements according to International Financial Reporting Standards. One of these accounting standards—IFRS 16 Leases—specifies how to recognize, measure, present and disclose leases. It came into force in 2019 and implemented a single lessee accounting model, contrary to a dual accounting approach for lease accounting. The latter approach enabled companies to keep leased tangible assets and respective liabilities off-balance sheet. By using a sample of companies from the energy industry (oil, gas, energy and mining sectors) that are listed on the Warsaw Stock Exchange, we examine, measure, and analyze the impact of IFRS 16 Leases implementation on the value of assets, liabilities and leverage on assets and leverage on equity. The paper may serve as an insightful case study of how the implementation of a new standard influences the financial situation of the affected companies in the energy industry. Our paper contributes to the scientific debate in the following three ways: (1) we confirmed the influence of IFRS 16 Leases on assets, liabilities, leverage on assets and leverage on equity that was anticipated in the literature, (2) using the auditing methodology, we demonstrated the material changes of assets and liabilities in the energy industry, (3) based on the research results, we suggested recommendations for further scientific studies.

Keywords: financial reporting; energy industry; leverage on assets; leverage on equity; leasing; IFRS 16; materiality (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.mdpi.com/1996-1073/15/4/1293/pdf (application/pdf)
https://www.mdpi.com/1996-1073/15/4/1293/ (text/html)

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:gam:jeners:v:15:y:2022:i:4:p:1293-:d:746415

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().