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

Legenzova Renata () and Žilaitytė Liveta ()
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Legenzova Renata: PhD, professor at the Faculty of Economics and Management, Vytautas Magnus University, Lithuania.
Žilaitytė Liveta: Financial project controller at Nokia, Lithuania.

Management of Organizations: Systematic Research, 2023, vol. 89, issue 1, 67-86

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.

Keywords: IFRS 16; lease accounting; right-of-use assets; lease liability; financial performance (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:morgsr:v:89:y:2023:i:1:p:67-86:n:4

DOI: 10.2478/mosr-2023-0005

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