The Effect of the IFRS 16: Constructive Capitalization of Operating Leases in the Turkish Retailing Sector


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Sarı E. S., Altıntaş A. T., Taş N.

Journal of Business, Economics and Finance (JBEF), cilt.5, sa.1, ss.138-147, 2016 (Hakemli Dergi)

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 5 Sayı: 1
  • Basım Tarihi: 2016
  • Dergi Adı: Journal of Business, Economics and Finance (JBEF)
  • Derginin Tarandığı İndeksler: EconLit
  • Sayfa Sayıları: ss.138-147
  • İstanbul Üniversitesi Adresli: Evet

Özet

The new International Financial Reporting Standard (IFRS) 16 issued by the International Accounting Standards Board will significantly
change accounting for leases. The most important issue is that operating leases beyond one year will be capitalized, which means Off-TheBalance Sheet (OBS) financing via operating lease is effectively eliminated. “IFRS 16: Leases” will fundamentally change the way that leases
are accounted for and reported in financial statements. This paper tries to illustrate the impact of IFRS 16 on financial statements and
financial ratios. The study is an ex ante research, simulating a predicted outcome of the new lease standard, which will be in effect after 1
January 2019. For this purpose, this research is applied to the Turkish retailing companies whose shares are publicly traded in the Istanbul
Stock Exchange. The study uses the constructive capitalization method for these companies. The results indicate that new standard will
have a statistically significant effect on some of the financial ratios tested (debt/asset, debt/equity, return on assets (ROA) and return on
equity (ROE)) for 2010 – 2013.