The Implementation of the International Financial Reporting Standard (IFRS 16 - “Leases”) by companies listed on the Bucharest Stock Exchange

Abstract

Abstract In accordance with the provisions of the International Financial Reporting Standard IFRS 16 “Leases”, as of January 1, 2019, insurance and reinsurance companies, non-bank financial institutions, credit institutions, brokerage companies, but also companies listed on the Bucharest Stock Exchanges which have the quality of both tenants and lessors, must present in the annual reports relevant information regarding the transactions within the leasing contracts. The study pursued two objectives, the identification of information on the application of IFRS 16 published in the annual reports issued in the period 2020-2021, by 30 non-financial entities out of a total of 62 listed at the date of the study at BVB, and the evaluation of how leases were reported and their impact on the financial statements. Regarding the publication of information on the application of IFRS 16, it turned out that it was heterogeneous, in various forms. Thus, only three companies published information on leases both as lessor and lessees in both reporting years (10% of the total), 14 companies specified in both reporting years about the application of the standard only as tenants (47% of the total), nine specified about the application of the standard as tenants only in the 2019 annual report (30% of the total), and four did not specify any information on its application in none of the reporting years (13% of the total). In terms of reporting the impacting figures the expenses determined by the leasing contracts on the financial statements, seven companies presented with data and figures from the tenant position in both years (23%), 10 only for 2019 (33% ), only two for 2020 (7%), and 11 did not present any figures (37%).