Implications of Accounting Standard Changes for Financial Reports: An Exploratory Study of the Transition to IFRS 16

Sammanfattning: Lease accounting has for a long time been a highly controversial topic due to the way operating leases are treated in the financial reporting. IFRS 16 is a new accounting standard for leases that aims to increase transparency by requiring the majority of all leases to be recognized on the balance sheet. However, within research, there is a lack of knowledge regarding how new financial reporting requirements, such as IFRS 16, might influence disclosure quality during the transition period. Hence, we attempt to fill in this gap by investigating the following research question, ―How is the transition to IFRS 16, as disclosed in financial reports of companies in the consumer industry, influencing the preconditions for financial statement analysis?‖ In total, 17 companies are studied by analysing their financial reports. In particular, we look at how the effects of IFRS 16 are disclosed and how the disclosure varies between companies. To conclude, it was found that the preconditions for conducting financial statement analysis at the transition to IFRS 16 could be distorted by several factors. For instance, we noted that there were variations in the scope of disclosure about the effect of IFRS 16 on financial metrics, targets and internal initiatives. This reduces the comparability and transparency in the short run. Hence, we encourage stakeholders and standard setters to pay attention to the accounting quality of the reports during implementations of new accounting standards.