How Does the IASB Use the Conceptual Framework in Developing IFRSs? An Examination of the Development of IFRS 16 Leases

Kabir, Humayun; Rahman, Asheq

doi:10.2308/jfir-52232

Cited by 16 publications

(20 citation statements)

References 42 publications

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“…Consistent with their importance, there is an extensive literature on leases (for a fuller review, see Barone et al 2014 or Morales-Díaz andZamora-Ramírez 2018). This includes examining the differences between disclosing and recognising leases on their use (e.g., Ely 1995;Sengupta and Wang 2011;Giner and Pardo 2018), contents of submissions to standard setters and conceptual basis (e.g., Kabir and Rahman 2018), the effect of leasing changes on business strategies and perceptions of lease accounting (e.g., Beattie et al 2006aBeattie et al , 2006b, and other topics. Of greater relevance to this paper is prior research that examines the impact of capitalising leases on financial ratios.…”

Section: Literature Review and Research Question Developmentmentioning

confidence: 99%

The Effect of Capitalising Operating Leases On Charities

Fahad

Scott

2021

Australian Accounting Review

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This paper examines the effect of capitalising operating leases on the total liabilities to total assets and surplus to total asset ratios for a sample of New Zealand charities. It finds that both ratios have significantly increased post-capitalisation and that expenditures change. This extends the constructive lease capitalisation literature to the not-for-profit sector. This paper also discusses the characteristics of charities' operating leases and how they differ from the for-profit sector. Overall, this paper provides timely evidence to standard setters, especially considering the current exposure draft converging International Public Sector Accounting Standard lease accounting with International Financial Reporting Standard 16 Leases.

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Section: Literature Review and Research Question Developmentmentioning

confidence: 99%

The Effect of Capitalising Operating Leases On Charities

Fahad

Scott

2021

Australian Accounting Review

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“…Third, the findings summarize that Huber's critique (Huber, 2020) (Kabir et al, 2018). However, their further improvements are planned to be added by the standard-setters, which might be the subject for further research.…”

Section: Research Resultsmentioning

confidence: 68%

“…Although as far as the updated Conceptual Framework is concerned, it has not been mentioned by scientists. Second, the requirements of the new IFRS, in particular IFRS 16, are justified not only within the Conceptual Framework (Kabir et al, 2018). The authors explain this by mitigating the impact of the consequences -high implementation costs.…”

Section: Prior Literature Reviewmentioning

confidence: 99%

“…It remained the open topics about the case and consequences of the revised Conceptual Framework. Even though among the current papers it was found the topics about the importance of the earning management concepts (Dhanda et al, 2018) and the Conceptual Framework in developing the new lease IFRS 16 (Kabir et al, 2018), these studies are not enough to describe all possible challenges in the current Conceptual Framework. The prior investigated challenges in the accounting of uncertainty (Barker et al, 2018), reporting financial instruments (Abdel-khalik, 2019), use of financial reporting after changes in 2018 (Davern et al, 2019) have a link to this study but also they are not disclosure all new existing difficulties in the revised Conceptual Framework of 2018.…”

Section: Introductionmentioning

confidence: 99%

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Grouping of Major Changes in Conceptual Framework of Financial Reporting and Analysis of New Challenges

Shkulipa¹

2021

Studia Universitatis „Vasile Goldis” Arad – Economics Series

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This article aims to research the major changes in the Conceptual Framework of Financial Reporting; to find out the new gaps in the current document; to group the changes into categories; to analyze the current difficulties and consequences of these changes for a consistent understanding between standard-setters and practitioners. The Onion research model based on the quantitative data collection with elements of descriptive analysis was considered as important contributions to the research methodology of the Conceptual Framework for Financial Reporting investigation. As a result, a comparative analysis of the financial reporting concepts was made between July 1989, September 2010, and March 2018. The implications of results are two-fold. On the one hand, the revised Conceptual Framework is a more comprehensive set of concepts that enhance the understanding between practitioners and standard-setters. On the other hand, it consists of the new gaps most of them in the ―Updating” category. It is concluded that this innovation complicates the reporting process for practitioners because it requires using of additional judgments. Besides, the investigation shows some IFRS are not justified within only the Conceptual Framework that might be the subject for further research.

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“…It replaces the previous leasing accounting standard, IAS17, and it applies after 1 January 2019 [1]. Some researchers have conducted studies on development and implement of IFRS16 [2,3]. Under the new accounting standard, lessees do not need to differentiate between operating and finance leases as almost all leases should be identified as finance leases except short-term leases and low-value leases.…”

Section: Introductionmentioning

confidence: 99%

Investigation of IFRS16 Effect on the Airlines

Yu¹

2019

JFA

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Under IAS17, operating leases can be reported in the notes of financial statements, so operating leases are not recognized in statements of financial position, and the lease payments are recognized as expenses and recorded in statements of profit and loss. Therefore, operating leases have the nature of off-balance sheet, and keeping operating leases off of the balance sheet has been the veil of the true nature of a company's liabilities. To increase the transparency of company's lease liabilities, IFRS 16 changes the way that lessees disclose operating leases in their financial statements. and relevant financial ratios including debt to asset ratio, asset turnover ratio and EBITD will also change. PwC, Deloitte, KPMG and Ernst & Young provide guides to help companies execute the new accounting standard, and they foresee that some industries will be influenced on the basis of the degree of dependence on operating leases. This paper will compare the accounting treatment of leases in IAS17 and IFRS16, and the impact on airlines will be analyzed from financial statements and financial ratios. For operating leases, the advantage of off-balance sheet will disappear, so Airlines that rely heavily on operating leases should consider the impact of lease capitalization on their businesses.

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How Does the IASB Use the Conceptual Framework in Developing IFRSs? An Examination of the Development of IFRS 16 Leases

Cited by 16 publications

References 42 publications

The Effect of Capitalising Operating Leases On Charities

The Effect of Capitalising Operating Leases On Charities

Grouping of Major Changes in Conceptual Framework of Financial Reporting and Analysis of New Challenges

Investigation of IFRS16 Effect on the Airlines

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