The reform of the IAS 17 and its impact on financial performance indicators
The balance sheet should give a true and fair view of the economic situation of a company. For many critics the IAS 17, which is the International Accounting Standard for leases, does not provide this aim in its actual version. At status quo, companies have the possibility to make an off‐balance‐sheet accounting of operating lease objects. As a consequence, the International Accounting Standard Board has started a reform of the IAS 17 and published an exposure draft, which plans to abolish the operating lease, so that every lease contract under one year has to be put on the balance sheet of the lessee. At first view the effect of the reform will be a simple balance sheet extension, because the lessee will have to capitalize the lease object as an asset on the balance sheet, and also show the future lease payments as a liability on the balance sheet. However, there will be significant effects on financial performance indicators, which could have an effect on managerial behavior. The diploma thesis compares the actual version of the lease standard with the main points of the exposure draft. Afterwards there is an empirical analysis of the effects, the lease capitalization will have on the balance sheet of the DAX‐30 companies. To investigate the impact on managers, the thesis analyzes how financial performance indicators influence managerial behavior and will present different kinds of performance measures. To make a conclusion on base of empirical evidence, the results of the previous analysis concerning the DAX‐30 companies are used to show the effects on certain management relevant KPIs like EBIT, ROI or the Economic Value Added.