Corporate debt is rising due to the introduction of international financial reporting standards, according to a new study.
A survey by Dresdner Kleinwort Wasserstein of 28 large companies that have released details on how IFRS will impact their accounts found that debt and other liabilities were up 16%.
The results suggest that IFRS is going to have a much larger impact on balance sheets than on the profit and loss statement, with the change in net income from the same companies dropping less than 3%.
The rise in debt can be attributed to the appearance on balance sheets of pension fund deficits, leases and securitisation vehicles, while the change in treatment to derivatives and subsidiaries are also having adverse effects.
However, some of these debt rises have been offset by increases in net equity, reports the Financial Times.
UK senior partner Phil Verity has been elected for a second term at Mazars
An audit partner has been appointed at Grant Thornton in its North West offices
KPMG has been appointed with “immediate” effect as the auditor of Dorcaster
The audit for Ibstock will be taken over by Deloitte following a competitive tender process