Balancing hospitality and reporting: analyzing the impact of ifrs 16 in the hotel industry

Abstract

The International Accounting Standards Board unveiled IFRS 16 -Leases in January 2016, replacing IAS 17 -Leases for reporting periods commencing on or after 1 st January 2019. The updated regulations introduce dissimilar accounting models for lessees and lessors. Although the significance of distinguishing between finance leases and operating leases has diminished for lessees, it still holds relevance for lessors. The influence of IFRS 16 on a company is contingent on the quantity of existing operating lease agreements and differs across various industries. The effect of the implementation of this standard in the hotel industry, as one of the industries with the highest amounts of leased assets, is the primary emphasis of this paper. Throughout the extensive literature review, the main challenges and consequences of this standard's implementation will be analyzed.