Does the IFRS 16 affect the key ratios of listed companies? Evidence from Poland

Indicator		Formula	Expected change
ROS (for H1)	Return on sales ratio	$\frac{Net income}{Sales}$	Increase
ROA (for H2A)	Return on assets ratio	$\frac{Net income}{Total assets}$	Decrease
ROE (for H2B)	Return on equity ratio	$\frac{Net income}{Equity}$	Increase
D/E (for H3)	Debt-to-equity ratio	$\frac{Debt}{Equity}$	Increase
D/A (for H3)	Debt-to-total assets ratio	$\frac{Debt}{Total assets}$	Increase
CR (for H4)	Current liquidity ratio	$\frac{Current assets}{Current liabilities}$	Decrease

[i] IFRS, International Financial Reporting Standard.

[ii] Source: Own elaboration based on the study by Krawczak and Dyląg [2018].

Table 2

Descriptive statistics and changes in total assets and liabilities (in thousands of PLN) by standard users before and after implementing IFRS 16

Item	Year, Δ	Standard users	N	Mean	Minimum	Maximum	Standard deviation
Total assets	2018	Polish Accounting Act users	186	30,908	49	563,668	63,456
		IFRS adopters	308	2,107,938	54	75,905,000	7,773,162
		Total	494	1,325,898	49	75,905,000	6,216,285
	2019	Polish Accounting Act users	186	31,347	35	591,346	63,398
		IFRS adopters	308	2,299,975	90	77,650,000	8,357,781
		Total	494	1,445,795	35	77,650,000	6,686,596
	Change	Polish Accounting Act users	186	1.42%
		IFRS adopters	308	9.11%
		Total	494	9.04%
Total liabilities	2018	Polish Accounting Act users	186	15,171	16	223,246	27,709
		IFRS adopters	308	1,005,321	164	28,402,000	3,344,601
		Total	494	632,511	16	28,402,000	2,682,695
	2019	Polish Accounting Act users	186	14,352	21	164,686	24,210
		IFRS adopters	308	1,191,435	37	34,513,000	3,921,738
		Total	494	748,242	21	34,513,000	3,146,991
	Change	Polish Accounting Act users	186	−5.40%
		IFRS adopters	308	18.51%
		total	494	18.30%

[i] IFRS, International Financial Reporting Standard.

[ii] Source: Own elaboration based on data retrieved from financial statements from the Orbis database.

Table 3

Characteristics of research subsamples by industry

Sector	Number of companies	Number of companies using IFRS 16 (test group)	Average lease liability (in thousands of PLN)
Construction	21	15	21,799
Trade	70	48	124,376
Manufacturing	172	121	94,502
Services	231	124	101,014

[i] IFRS, International Financial Reporting Standard.

[ii] Source: Own elaboration based on data retrieved from financial statements from the Orbis database.

Table 4

Correlations matrix

Variables	Year	Standard	Year × Standard	ROS	ROA	ROE	D/E	D/A	CR
Year	1
Standard	0	1
Year × Standard	0.673	0.523	1
ROS	−0.024	0.033	0.016	1
ROA	−0.014	0.05	0.031	0.083	1
ROE	0.032	0.046	0.052	0.077	0.302	1
D/E	−0.009	−0.02	0.012	0.01	0.017	−0.198	1
D/A	0.031	−0.03	0.011	0	−0.319	0.005	−0.028	1
CR	−0.018	−0.091	−0.048	0.028	0.008	0.005	−0.023	−0.014	1

[i] CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

Table 5

Descriptive statistics of the dependent variables

Ratio	Year	Standard users	N	Mean	Q1	Q3	Standard deviation
ROS	2018	Polish Accounting Act users	186	−14	−0.08	0.06	170
		IFRS adopters	308	−9.2	0	0.08	113
		Total	494	−11	−0.02	0.07	137
	2019	Polish Accounting Act users	186	−87	−0.03	0.08	1340
		IFRS adopters	308	−11	−0.004	0.08	133
		Total	494	−40	−0.01	0.08	828
ROA	2018	Polish Accounting Act users	186	−0.16	−0.09	0.05	1.03
		IFRS adopters	308	−0.06	−0.003	0.07	1.76
		Total	494	−0.1	−0.03	0.07	1.5
	2019	Polish Accounting Act users	186	−0.38	−0.04	0.09	4.2
		IFRS adopters	308	−0.03	−0.005	0.06	0.82
		Total	494	−0.16	−0.02	0.07	2.7
ROE	2018	Polish Accounting Act users	186	−0.33	−0.19	0.14	2.1
		IFRS adopters	308	−0.13	0.01	0.14	3.4
		Total	494	−0.21	−0.02	0.14	3
	2019	Polish Accounting Act users	186	−0.24	−0.05	0.005	2.4
		IFRS adopters	308	0.11	0.16	0.14	3.1
		Total	494	−0.02	−0.02	0.15	2.8
D/E	2018	Polish Accounting Act users	186	2.1	0.37	1.67	8
		IFRS adopters	308	1.2	0.41	1.44	4.9
		Total	494	1.5	0.4	1.5	6.3
	2019	Polish Accounting Act users	186	1.2	0.29	1.4	3.8
		IFRS adopters	308	1.6	0.46	1.6	5.4
		Total	494	1.4	0.39	1.6	4.9
D/A	2018	Polish Accounting Act users	186	1.4	0.29	0.69	8.7
		IFRS adopters	308	0.6	0.35	0.62	1.1
		Total	494	0.92	0.33	0.63	5.4
	2019	Polish Accounting Act users	186	1.8	0.26	0.66	12
		IFRS adopters	308	1.4	0.36	0.66	14
		Total	494	1.5	0.32	0.66	13
CR	2018	Polish Accounting Act users	186	8.9	1	2.8	65
		IFRS adopters	308	2	1	2	2.1
		Total	494	4.6	1	2.3	40
	2019	Polish Accounting Act users	186	6.3	1.1	3.2	26
		IFRS adopters	308	1.9	0.92	2.1	2.2
		Total	494	3.5	1	2.41	16

[i] CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; IFRS, International Financial Reporting Standard; ROA, return on assets; ROE, return on equity; ROS, return on sales.

[ii] Source: Own elaboration based on data retrieved from financial statements from the Orbis database.

Table 6

DID results of model estimation on the total research sample

Variables	Model 1 (ROS)	Model 2 (ROA)	Model 3 (ROE)	Model 4 (D/E)	Model 5 (D/A)	Model 6 (CR)
Year × Standard (DID variable)	71.7 (99.45)	0.24 (0.34)	0.17 (0.35)	1.27^* (0.77)	0.47 (1.34)	2.57 (5.12)
Standard	4.68 (14)	0.11 (0.13)	0.19 (0.25)	−0.87 (0.65)	−0.85 (0.64)	−6.96 (4.74)
Year	−73.34 (98.95)	−0.21 (0.32)	0.08 (0.23)	−0.9 (0.65)	0.32 (1.09)	−2.67 (5.12)
Constant	−13.9 (12.42)	−0.16^** (0.08)	−0.33^** (0.15)	2.06^*** (0.58)	1.44^** (0.64)	8.94^* (4.74)
R²	0.0025	0.0034	0.0033	0.0035	0.002	0.0089

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] DID, difference in differences; CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

[iii] Source: Own elaboration based on data retrieved from financial statements obtained from the Orbis database (Bureau van Dijk, A Moody's Analytics Company, Amsterdam, the Netherlands) and calculations using the STATA program (StataCorp LLC, Lakeway Drive, Texas, USA).

Table 7

DID model estimation results on research sample truncated by 1p outliers

Variables	Model 1 (ROS)	Model 2 (ROA)	Model 3 (ROE)	Model 4 (D/E)	Model 5 (D/A)	Model 6 (CR)
Year × Standard (DID variable)	−0.19 (0.31)	−0.07^* (0.04)	−0.08 (0.09)	0.67^** (0.3)	0.05 (0.05)	−0.13 (0.19)
Standard	0.45^* (0.24)	0.06^* (0.03)	0.14^** (0.06)	−0.31 (0.23)	0.01 (0.03)	−0.22^* (0.13)
Year	0.23 (0.29)	0.07^** (0.03)	0.07 (0.08)	−0.52^** (0.23)	−0.02 (0.04)	0.18 (0.15)
Constant	−0.63^*** (0.23)	−0.07^*** (0.02)	−0.11^** (0.05)	1.5^*** (0.19)	0.53^*** (0.03)	1.93^*** (0.11)
No. of observations	969	969	969	970	968	889
R²	0.0086	0.0066	0.0073	0.0056	0.0028	0.0233

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] 1p, one percentile; DID, difference in differences; CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

[iii] Source: Own elaboration based on data retrieved from financial statements obtained from the Orbis database and calculations using the STATA program.

Table 8

DID model estimation results on research sample truncated by 5p outliers

Variables	Model 1 (ROS)	Model 2 (ROA)	Model 3 (ROE)	Model 4 (D/E)	Model 5 (D/A)	Model 6 (CR)
Year × Standard (DID variable)	−0.03 (0.03)	−0.02 (0.02)	−0.02 (0.03)	0.15 (0.14)	0.08^** (0.03)	−0.13 (0.19)
Standard	0.05^** (0.02)	0.04^*** (0.01)	0.04^* (0.02)	0.03 (0.1)	−0.02 (0.02)	−0.22^* (0.13)
Year	0.02 (0.03)	0.01 (0.01)	0.01 (0.03)	−0.08 (0.12)	−0.05^*** (0.02)	0.18 (0.15)
Constant	−0.05^*** (0.02)	−0.02^* (0.01)	0.02 (0.02)	1.08^*** (0.09)	0.52^*** (0.02)	1.93^*** (0.11)
No. of observations	888	889	890	889	890	889
R²	0.009	0.019	0.0054	0.0039	0.0098	0.0132

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] 5p, five percentile; DID, difference in differences; CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

[iii] Source: Own elaboration based on data retrieved from financial statements obtained from the Orbis database and calculations using the STATA program.

Table 9

Descriptive statistics of profitability indicators

Indicator	Numerator	No. of observations	Mean	Q1	Q3	Standard deviation
ROS	Net income	988	−7.38	−0.15	0.08	593
ROS	EBIT	988	−2.7	0	0.11	54
ROA	Net income	988	−0.13	−0.02	0.07	2.2
ROA	EBIT	988	−0.03	−0.0004	0.09	1.8
ROE	Net income	988	−0.11	−0.02	0.14	2.9
ROE	EBIT	988	0.08	0.01	0.2	1

[i] EBIT, earnings before interest and taxes; ROA, return on assets; ROE, return on equity; ROS, return on sales.

[ii] Source: Own elaboration based on data retrieved from financial statements obtained from the Orbis database and calculations using the STATA program.

Table 10

DID results of models with different numerators of profitability ratios on the total sample

Variable	Model 1 (ROS with net income)	Model 7 (ROS with EBIT)	Model 2 (ROA with net income)	Model 8 (ROA with EBIT)	Model 3 (ROE with net income)	Model 9 (ROE with EBIT)
Year × Standard (DID variable)	71.7 (99.45)	0.37 (5.51)	0.24 (0.34)	0.12 (0.3)	0.17 (0.35)	−0.08 (0.14)
Standard	4.68 (14)	−3.51 (4.03)	0.11 (0.13)	0.07 (0.07)	0.19 (0.25)	0.24^* (0.12)
Year	−73.34 (98.95)	−0.18 (0.58)	−0.21 (0.32)	−0.11 (0.3)	0.08 (0.23)	0.16 (0.12)
Constant	−13.9 (12.42)	−0.56^*** (0.22)	−0.16^** (0.08)	−0.06 (0.06)	−0.33^** (0.15)	−0.13 (0.12)
R²	0.0025	0.0009	0.0034	0.0016	0.0033	0.0126

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] DID, difference in differences; EBIT, earnings before interest and taxes; ROA, return on assets; ROE, return on equity; ROS, return on sales.

Table 11

DID results for the construction sector

Variables	Model 1 (ROS)	Model 2 (ROA)	Model 3 (ROE)	Model 4 (D/E)	Model 5 (D/A)	Model 6 (CR)
Year × Standard (DID variable)	0.66 (1.54)	−0.14 (0.29)	−2.44 (2.8)	−0.23 (4.3)	0.12 (0.33)	−0.15 (0.34)
Standard	0.7 (0.71)	0.06 (0.06)	1.19 (1.09)	−1.56 (4.85)	0.08 (0.12)	−0.09 (0.2)
Year	−0.6 (1.49)	−0.02 (0.14)	1.52 (1.1)	−3.95 (2.68)	0.08 (0.18)	0.04 (0.3)
Constant	−0.74 (0.71)	−0.07 (0.06)	−1.22 (1.09)	5.16^** (2.55)	0.71^*** (0.07)	1.35^*** (0.16)
No. of observations	42	42	42	42	42	42
R²	0.0916	0.0149	0.0096	0.0739	0.0262	0.0357

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] DID, difference in differences; CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

Table 12

DID results for the trade sector

Variables	Model 1 (ROS)	Model 2 (ROA)	Model 3 (ROE)	Model 4 (D/E)	Model 5 (D/A)	Model 6 (CR)
Year × Standard (DID variable)	−39.1 (39.57)	−0.02 (0.28)	0.79 (0.8)	1.75^* (0.91)	0.35 (0.3)	−0.93 (1.3)
Standard	0.96 (1.03)	−0.14^* (0.08)	0.16 (0.13)	−0.97^* (0.54)	0.14^* (0.08)	0.14 (0.5)
Year	−0.35 (1.59)	−0.09 (0.07)	−0.22 (0.2)	−0.42 (0.48)	−0.03 (0.06)	0.94 (1.04)
Constant	−1.01 (1.03)	0.06 (0.04)	0.06 (0.07)	1.58^*** (0.42)	0.49^*** (0.04)	1.94^*** (0.21)
No. of observations	140	140	140	140	140	140
R²	0.0134	0.0061	0.0128	0.0298	0.0272	0.007

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] DID, difference in differences; CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

Table 13

DID results for the manufacturing sector

Variables	Model 1 (ROS)	Model 2 (ROA)	Model 3 (ROE)	Model 4 (D/E)	Model 5 (D/A)	Model 6 (CR)
Year × Standard (DID variable)	−44.03 (48.12)	0.96 (1.09)	0.53 (0.55)	−0.74 (1.24)	−0.83 (3.1)	−0.14 (1.12)
Standard	32.63 (46.73)	0.36 (0.26)	0.21 (0.16)	0.29 (0.77)	1.8 (1.73)	−0.9 (0.83)
Year	44.67 (45.08)	−0.99 (1.09)	−0.53 (0.54)	0.82 (1.01)	0.86 (3.1)	−0.06 (1.1)
Constant	−44.95 (45.08)	0.35 (0.26)	−0.15 (0.15)	0.84^* (0.43)	2.26 (1.73)	3.04 (0.81)
No. of observations	344	344	344	344	344	344
R²	0.0063	0.0238	0.0263	0.0018	0.0147	0.018

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] DID, difference in differences; CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

Table 14

DID results for the services sector

Variables	Model 1 (ROS)	Model 2 (ROA)	Model 3 (ROE)	Model 4 (D/E)	Model 5 (D/A)	Model 6 (CR)
Year × Standard (DID variable)	159.24 (171.11)	0.04 (0.31)	0.16 (0.58)	2.48^** (1.15)	1.64 (2.26)	4.77 (8.86)
Standard	−8.36 (10.77)	0.003 (0.25)	0.25 (0.54)	−1.36 (1.01)	−0.6 (0.76)	−11.76 (8.22)
Year	−148.68 (170.78)	0.12 (0.19)	0.35 (0.3)	−1.64^* (1)	0.15 (1.17)	−4.81 (8.86)
Constant	−2.49^* (1.48)	−0.13^*** (0.04)	0.43^* (0.25)	2.58^*** (0.98)	1.29^* (0.75)	13.61^* (8.21)
No. of observations	462	462	462	462	462	462
R²	0.0053	0.0337	0.0048	0.0116	0.0028	0.0125

[i] ^***, ^**, and ^* indicate statistical significance at 1%, 5%, and 10%, respectively.

[ii] DID, difference in differences; CR, current liquidity ratio; D/A, debt-to-total assets ratio; D/E, debt-to-equity ratio; ROA, return on assets; ROE, return on equity; ROS, return on sales.

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.2478/ijme-2022-0016 | Journal eISSN: 2543-5361 (formerly 2299-9701) | Journal ISSN: 2299-9701

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Language: English

Page range: 299 - 315

Submitted on: Mar 30, 2022

Accepted on: Sep 1, 2022

Published on: Sep 30, 2022

Published by: SGH Warsaw School of Economics

In partnership with: Paradigm Publishing Services

Publication frequency: 4 issues per year

Keywords:

difference in differences,

leverage,

profitability,

leasing

JEL:

M40,

M41,

M48

Related subjects:

Business and economics,

Business management,

Management accounting, financial controlling, cost calculation, investment

© 2022 Anna Białek-Jaworska, Justyna Dobroszek, Paulina Szatkowska, published by SGH Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 58 (2022): Issue 3 (September 2022)