Capitalization of operating leases and its impact on financial metrics

The International Accounting Standard Board issued the IFRS 16. This standard will significantly change the accounting for leases. The main change is operating leases will be capitalized, changing the treatment in which these contracts will be recorded and reported in the financial statements. By Incorporating the amounts “out of balance” into the financial statements, the amounts presented in the financial statements and, consequently, the financial metrics are altered. The results of this
study show significant changes in the amounts of assets and liabilities in the balance sheet and significant impacts on all financial ratios analyzed, which will change the use in decision makers.