IFRS 16 - Impact on the Assets of the Major Airlines Operating in Brazil

Abstract

The article aims to study the impacts that the adoption of IFRS 16 will have on the financial position, that is, what will be the impact on the total value of assets of airlines operating in the Brazilian market. It is evident that the new accounting of aircraft acquired through operating leases, an essential tool for any company in the sector, is fully in line with the essence of the operation. Therefore, the authors structured the methodology through a comparison of indicators between 3 companies in the Brazilian airline industry, together with data collection through accounting information obtained in explanatory notes on future payments of operating leases. The findings show that, with IFRS 16, there were significant changes in the indebtedness indicators of companies, due to the significant changes in the accounting of assets, affecting the capital structure and profitability of companies.

The Effect of Transition from IAS 17 to IFRS 16 — Based on the Case Study of Tesco

“…Moreover, according Olivo et al (2022. ), Eidy et al (2021) and Raoli (2021), company value, capital structure, economic performance and market reactions will also receive the impact of the new model.…”

Implications of IFRS 16 on Indian Airline Industry

“…Since Indian economy is following a policy of carving out of and carving in IFRS while developing Indian Accounting Standards, it is relevant to study the initial implications of IFRS 16 on Profit and Loss Account and Balance Sheet. According to the study (Tofanelo et al, 2021) companies operating in airline industries engaged more in operating leases are most affected by IFRS 16, therefore it is contemplated that impact of implementation of IFRS 16 is remarkable in this sector in Indian market. Therefore, the purpose of this research is to predict the short-term effects of implementing IFRS 16 at India's biggest airline, Indigo Ltd. Because financial ratios are a reflection of a company's success, we also look at how IFRS 16 has changed those ratios.…”