ISSN: 2225-8329
Open access
This study investigates the financial impact of the transition from IAS 17 to MFRS 16 (the Malaysian equivalent of IFRS 16) Leases among companies listed on the Bursa Malaysia. The implementation of this standard, effective January 1, 2019, fundamentally altered lease accounting by requiring nearly all lease contracts to be recognized on the balance sheet, effectively eliminating the previous "off-balance sheet" treatment for operating leases. The primary objective of this research is to analyse the resultant changes in four key financial indicators: total assets, total liabilities, EBITDA, and debt-to-equity (leverage) ratios. Employing a quantitative comparative design, the study utilizes secondary data extracted from audited annual reports, comparing the 2018 (pre-adoption) and 2019 (post-adoption) financial periods. The theoretical framework is rooted in addressing information asymmetry and agency problems through enhanced transparency and comparability in financial reporting. The studies show significant impact to technology, telecommunication and media, and health care industries. The research sample size is 103 listed companies.
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