Impact of New Standard "IFRS 16 Leases" on Statement of Financial Position and Key Ratios: A Case Study on an Airline Company in Turkey

Öztürk, Meryem

doi:10.20409/berj.2016422344

Cited by 29 publications

(22 citation statements)

References 5 publications

(5 reference statements)

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“…Regarding the literature in IFRS 16, Öztürk and Serçemeli (2016) investigate the effect of applying IFRS 16 on the financial statements and the financial ratios on airline companies. The results show that applying IFRS 16 lead to significant increases in the assets and liabilities, which will be reflected on significant increase on leverage and significant decrease on ROA.…”

Section: Scientific Journal For Financial and Commercial Studies And mentioning

confidence: 99%

“…Up-to date and to my knowledge no published research on the compliance level with MPDR. Prior studies regarding the IFRS 16 focused on the financial consequences of applying this standard (Giner & Pardo, 2018;Morales & Zamora, 2018;Öztürk & Serçemeli, 2016;Spånberger & Rista, 2020). So, this study will be a seminal research on compliance with IFRS 16 MPDR.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Compliance with IFRS 16 Mandatory Presentation and Disclosure Requirements and Company Characteristics: Evidence from an Emerging Market

Ali

2021

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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Section: Scientific Journal For Financial and Commercial Studies And mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Compliance with IFRS 16 Mandatory Presentation and Disclosure Requirements and Company Characteristics: Evidence from an Emerging Market

Ali

2021

المجلة العلمیة للدراسات والبحوث المالیة والتجاریة

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“…This paper is innovative because, although there is some accounting and professional literature about the impact of services in leases, as cited in this article, there is a substantial lack of scientific literature on the subject, especially on wet leases. A few articles have addressed IFRS 16 for the airline industry (Öztürk and Serçemeli 2016); Bourjade et al 2017); (Wei-Tung et al 2018), but not on the subject matter of this article. Briggs at al.…”

Section: Literature Reviewmentioning

confidence: 99%

Aircraft Wet Leases: Accounting Dissonance with Competitive Strategy and Travelers’ Perspectives

Bellandi¹

2018

IJBM

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Under IFRS 16 and Topic 842 a lessee’s right to control the use an aircraft in a wet lease is an asset. On the other hand, contract analysis sees a wet lease as an opportunistic, external, temporary, competitive tool for flight flexibility and tactic cost advantage. Finally, travelers may be worried of safety and service quality or disruption in a wet lease, as the flight is not operated by their airline. This article addresses the accounting for aircraft wet leases as an exemplar case of a lease with substantial services, to discover that there is dissonance between the economic views behind accounting, business model and competitive strategy, and user service perspective. After a thorough analysis of IFRS 16 and Topic 842 applied to wet leases for the first time in a public study, a review of disclosures in financial statements of 59 sampled airlines confirms a clear contrast between the competitive analysis, traveler’s perspective and the accounting view. Such a dystonia is supposed to reflect the view of investors and creditors, which the IASB’s and FASB’s Conceptual Frameworks denote as primary users of financial statements, as opposed to other members of the public, including customers. This results in a failure to give enough space to the indirect effects of such alternative views on customers’ demand and revenue, hence company’s prospects for future net cash inflows, which according to the Conceptual Framework is the main driver of investors and creditors decision making. Highlights Contract analysis is provided on wet leases as a business model competitive tool. Analysis under IFRS 16 and Topic 842 and IAS 17/IFRIC 4 and Topic 840 is provided. Above views are compared with travelers’ concerns about safety and service quality. Airline financial statements disclosures on these three views are analyzed. Views are traced to primary versus other users’ conflict in the Conceptual Framework.

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“…The core of the reform is the move from the previous risk-benefit approach of IAS 17 to the asset-liability approach of IFRS 16. The "assets and liabilities" approach is based on a uniform accounting model (right of use), whereby in the future, as a rule, all leases and rentals will be reflected in the balance sheet with the corresponding rights of use and liabilities (Joubert, Garvie, & Parle, 2017;Morales-Díaz & Zamora-Ramírez, 2018;Öztürk & Serçemeli, 2016). Accounting rules are no longer based on the economic ownership of the leased asset, but on the rights and obligations arising from a leasing contract (Toferer, 2018).…”

Section: Introductionmentioning

confidence: 99%

Untitled

2020

CBR

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Leasing is confirmed among the preferred forms of financing by SMEs (Small and Medium Enterprises), even if its use grows both among large companies and private individuals. The stipulated in Europe increased in 2017 by 8.3% over the previous year. From 1 January 2019 the new accounting standard IFRS 16 is in force, which concerns the accounting of leasing contracts. The new methods of accounting for leasing contracts in the financial statements drawn up based on international accounting standards come into force. In fact, as from 1 January 2019, the IAS adopters are required to apply the new IFRS 16 standard, introduced in place of IAS 17, with the aim of standardizing the methods for recognizing leasing contracts in the financial statements. Scientifically, the most important researches concerning leasing have dealt with the topic focusing on accounting harmonization, accounting for leasing, capitalization of leasing and tax. Through the theoretical analysis and the simulation of our case study we want to answer a question: How the change in the accounting of leases is reflected in the financial statements?

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Impact of New Standard "IFRS 16 Leases" on Statement of Financial Position and Key Ratios: A Case Study on an Airline Company in Turkey

Cited by 29 publications

References 5 publications

Compliance with IFRS 16 Mandatory Presentation and Disclosure Requirements and Company Characteristics: Evidence from an Emerging Market

Compliance with IFRS 16 Mandatory Presentation and Disclosure Requirements and Company Characteristics: Evidence from an Emerging Market

Aircraft Wet Leases: Accounting Dissonance with Competitive Strategy and Travelers’ Perspectives

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