The Impact of a new way to lease reporting in a retail sector

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62156489%3A43110%2F18%3A43915349" target="_blank" >RIV/62156489:43110/18:43915349 - isvavai.cz</a>

Result on the web

<a href="http://ocs.ef.jcu.cz/index.php/inproforum/INP2018/paper/viewFile/1083/658" target="_blank" >http://ocs.ef.jcu.cz/index.php/inproforum/INP2018/paper/viewFile/1083/658</a>

DOI - Digital Object Identifier

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Result language

angličtina

Original language name

The Impact of a new way to lease reporting in a retail sector

Original language description

Studies on the use of lease carried out have shown that operational leases are utilized in some sectors more than in others. In these sectors, operating leases represent an alternative to massive capital investment. One of these sectors was chosen to assess the expected impacts of IFRS 16. This is the retail sector. Retail is identified as the sector that should be most affected by the new lease reporting methodology. The most common leased asset is a real estate in this sector. It is either a store with equipment or a retail space. Majority of lease contracts take the form of a medium-term operating leases (3-9 years) with options to extend the lease term. Retail space rental is a fundamental part of the business model of these entities. The ratio of operating and finance leases for selected companies in the retail sector is 96%, the median is 95%. For this reason, significant impacts of the new IFRS 16 can be expected in this sector. An important factor influencing the magnitude of the changes is not only the percentage of the operating lease to the total lease, but also the volume of unrecognized assets and leasing liabilities. The financial statements of the twenty largest retail companies operating within the EU listed in the EU stock-exchange market, reporting according to IFRS were subject of the research. The study revealed that the amount of assets (rights to use) and unrecognized lease liabilities thatcorresponds to the operating lease is closely related to the type of leased asset and its carrying amount. The average increase in total assets is 37% and debts 55%. The decrease in equity of 4.5 % is due to the fact that the carrying amount of the leased asset usually decreases faster than the carrying amount of the lease liability.

Czech name

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Czech description

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Type

D - Article in proceedings

CEP classification

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OECD FORD branch

50205 - Accounting

Project

<a href="/en/project/GA18-14082S" target="_blank" >GA18-14082S: Fair corporate taxation: Measurement of the impact of the corporate profit shifting on the budget of the Czech Republic</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection

Proceedings of the 12th International Scientific Conference INPROFORUM

ISBN

978-80-7394-726-2

ISSN

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e-ISSN

2336-6788

Number of pages

7

Pages from-to

43-49

Publisher name

Jihočeská univerzita v Českých Budějovicích

Place of publication

České Budějovice

Event location

České Budějovice

Event date

Nov 1, 2018

Type of event by nationality

WRD - Celosvětová akce

UT code for WoS article

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