Does Transition to IFRS 16 Affect Companies Financial Performance: The Case of Baltic Listed Companies

Abstract

The paper assesses the effect of transitioning to IFRS 16 on Baltic listed companies’ financial performance. The results revealed that 74.63% of sample companies were affected with an average 8.68% increase in total assets and 13.03% increase in total liabilities. Return on assets and assets turnover ratios of the affected companies decreased by an average of 8.33%, the quick ratio and current ratio decreased by 7.84%, while the debt-to-equity ratio increased by 28.63%. The sectors most heavily impacted by transitioning to IFRS 16 were communication services and basic materials sectors.

Keywords

Cite this article

Legenzova, R. & Žilaitytė, L. (2023). Does Transition to IFRS 16 Affect Companies Financial Performance: The Case of Baltic Listed Companies. Management of Organizations: Systematic Research, 89(1), 67–86. https://doi.org/10.2478/mosr-2023-0005

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