Aspects of Some Changes Regarding the Application of IFRS 16
Cristina-Valeria Laslo ()
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Cristina-Valeria Laslo: â€ž1st of December 1918â€ University of Alba Iulia
Ovidius University Annals, Economic Sciences Series, 2019, vol. XIX, issue 2, 783-788
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.
Keywords: leasing contract; financial situation; financial leasing; loan value (search for similar items in EconPapers)
JEL-codes: M40 M41 (search for similar items in EconPapers)
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