IFRS 16 - Implementering i årsregnskabsloven

Rasmus Christiansen & Mikkel Morgenstjærne Jørgensen

Student thesis: Diploma thesis


The purpose of this assignment is to study the option of a optional implementation of the new International Financial Reporting Standard on leases, IFRS 16, for companies that present their annual report in accordance with the provisions of the Danish Financial Statements Act. This includes whether it would be beneficial for individual companies to implement IFRS 16 as a voluntary option for their applied accounting principles. We begin the assignment with an introduction on the differences between the current accounting standard IAS 17 and the new accounting standard IFRS 16. Here, we explain the consequences that it would entail in the annual report if a voluntary implementation of IFRS 16 would be made. It is seen that the implementation of the new accounting standard will have a significant impact on recognition and measurement in the company’s annual report. Subsequently, the significance of this new recognition will be examined regarding key figures, valuation and other material matters. It is seen that the significance of the changes in the annual report can both be positive as well as negative, depending on the company’s individual situation. The benefits of the optional implementation must be seen in relation to the significant administrative burdens that will also be expected in such an implementation. In order to carry out the above mentioned analysis we have based our understanding on professional publications as well as interviews by relevant State authorized Public Accountants. The interviewers consist of a partner from Deloitte and a chief consultant from the Danish Business Authority, both of whom have a significant knowledge on the new accounting standard IFRS 16 and relevant experience in working with the standard. Based on the assignment, we can conclude that there are several companies that could benefit from implementing IFRS 16 to their accounting principles. The main advantages of the implementation of IFRS 16, can be seen for companies that are measured on EBITDA based key figures. This could, for example, be a capital funded company, that would have an advantage in valuing their shares through a EBITDA multiple valuation. In addition, other companies that on the basis of specific circumstances, could benefit from an implementation of IFRS 16. However, the benefits of the implementation should compensate for the disadvantages that lay in the administrative burdens of the implementation. The obvious companies that will benefit from the option of implementing IFRS 16 will be subsidiaries that must report to a parent company that is presenting their financial statements in accordance with IFRS.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2019
Number of pages97