IFRS 16 - Leases: Ændring i regnskabsmæssig behandling af leasing

Christian Camilo Porsborg & Martin Larsen

Student thesis: Diploma thesis


The objective of this thesis is to examine the effect of the new International Financial Reporting Standard on leases, IFRS 16, applicable to entities presenting their financial statements under IFRS. Another objective is to examine the reasons for framing IFRS 16 and why it has taken almost 10 years to formulate the financial reporting standard, and lastly to examine the effect of the implementation of IFRS 16 on share analysts. In this thesis, we seek to address the matter of framing by involving and conducting an open key informant interview of IFRS Subject Matter Expert Jan Peter Larsen. The impact of IFRS 16 we examine primarily by comparing IFRS 16 with IAS 17 and identifying the amendments from IAS 17 to IFRS 16, with particular focus on the accounting treatment. Then we examine and calculate the effect in a practical example by way of implementation of IFRS 16 at Danish oil and shipping giant A.P. Møller-Maersk. In this context, we will involve and conduct a partially structured interview of State- Authorised Public Accountant and IFRS Subject Matter Expert Bjarne Jørgensen, who has experience of the shipping industry. Lastly, we will examine the effect of the implementation of IFRS 16 on share analysts by conducting a partially structured interview of a share analyst with Danske Bank, Robert Gartner. Throughout the thesis, we will use publications on IFRS 16 by the IASB, the primary issuer of the financial reporting standard, as a basis. The conclusion we draw in our thesis is that the IASB framed IFRS 16 to increase the informative value and transparency of financial statements including operating lease commitments and for the financial statements to give a more true and fair view. Another conclusion drawn is that the reason for the lengthy framing process has been that there have been unusually many stakeholders who have affected or tried to affect the framing of IFRS 16. We also conclude by comparing IFRS 16 and IAS 17 that both assets and liabilities will increase as a result of IFRS 16 because under this Standard operating leases must be recognised in the balance sheet. Also, EBITDA goes up and the solvency ratio in particular goes down. For that reason, we conclude in our practical example that A.P. Møller Maersk is to recognise DKK 60 billion in their balance sheet and that EBITDA drops by DKK 20 billion. Profit for the year remains unchanged, and the solvency ratio goes down from 57.26% to 48.89%. Finally, we conclude that informative value and transparency will provide share analysts with better conditions for their analyses and valuation. Also, the effect of IFRS 16 will take many analysts by surprise as many of them have not kept abreast of the Standard.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2016
Number of pages100