Impact of IFRS 16 and IAS 17 Changes on Financial Statements of Airline Companies

IFRS 16 AND IAS 17 CHANGES
AND THE IMPACT ON
FINANCIAL STATEMENTS ON
AIRLINE COMPANIES

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
1. Impact of accounting for leases with industry effects..........................................................................3
2. Impact of accounting for leases on financial positions........................................................................4
3. Impact of accounting for leases on Financial statement:......................................................................5
4. Impact of accounting for leases with financial ratios...........................................................................7
REFERENCES............................................................................................................................................9

INTRODUCTION
Recent focus of companies has been put on rising the credibility and disclosure of
Financial Statements. Although the IFRS render valuable contributions to the issue of business
efficiency, durability and equivalency, distances still need to be protected. The Financial
Statement Users opposed the IAS 17 Lease Contract, which takes place between the IFRS, since
the financial statements of the firms with large business leases are not entirely true. The project
report is based on literature review of impact of these standards on financial statements, ratios of
airline companies.
MAIN BODY
Literature review: A review of literature or narration is a form of review paper. A
literature analysis is a research article comprising the latest observations, as well as conceptual
and analytical approaches to a given subject. In the aspect of airline companies of UK, the
literature review has been done in order to find out impact of IAS 17 and IFRS 16 on their
financial statements and ratios.
1. Impact of accounting for leases with industry effects.
The literature review has been discussed on industry effect linked to leasing standards.
Herein, below it is mentioned in such manner:
According to Morales-Díaz and Zamora-Ramírez (2018) focused on airline industry of United
Kingdom and identified the operating lease capitalization on the financial statements and ratios.
The approaches used for effective lease capitalization have been developed by the organization
for the purpose of demonstrating the value of lease operational liabilities for the widely
employed risk / performance ratios in capitalizing unrecorded leases and their effect on British
airlines' assets and liabilities. It has been intended to show the effect both of gross profit and net
benefit on the operating lease capitalization, because the influence of operating leases on the
income statement may be important. The findings of the analysis show a significant impact on
the typical productivity rates of the unrecognized operating leases. The goal of the analyses was
to determine the effect on the financial results of the recapitalized operating leases of listed firms