Economic and Financial Impacts Arising from IFRS 16 Recognition and Measurement Criteria on Airlines

Abstract

The study aimed to comparatively analyze, before and after adoption, the impacts of IFRS 16 on the financial statements of airlines. For this, the methodology adopted in this research is descriptive with a qualitative and quantitative approach. In order to identify the the impacts introduced by the standard, balance sheets, income statements and explanatory notes of 43 airlines for the period from 2017 to 2020 were analyzed, which allow comparing two years before and after the adoption of the standard, then calculated ten economic and financial indicators that could be impacted by the changes introduced by the new way of accounting for leases for lessee companies. With this study, it was concluded that the economic and financial indicators of the airlines were impacted by the standard, where there was a decrease in the indicators of current liquidity, general liquidity, asset turnover and return on assets, while there was an increase in the indebtedness, the immobilization of shareholders' equity, the EBITDA and the participation of long-term leasing obligations over total liabilities. With the calculation of right of use on total assets and right of use on property, plant, and equipment, the study demonstrated the representativeness of the right of use account that corresponds more than 22% of total assets and more than 33% of property, plant, and equipment.