The paper is purposed to assess the expected impact of implementing the new international financial reporting standard (IFRS 16) Leases on key financial ratios and performance metrics of selected listed companies in Kenya. The study focused on the extent to which the key liquidity ratios, profitability ratios, and leverage ratios change once the new standard comes into effect. Basing the study on financial contracting theory, case study design was adopted and all the 6 firms registered under the insurance sector listed in the Nairobi securities exchange formed the population of the study from where a sample of 3 companies was selected using purposeful sampling technique. Secondary data collected from the sampled company annual reports and financial statements was analyzed through ratio analysis after restating the various income statement and financial position elements as per the provisions of IFRS 16. The results indicate an increase in total assets, total liabilities, debt to equity ratio and debt to assets ratio, while, a reduction in the liquidity ratios and asset turnover ratio as a consequence of incorporating IFRS 16 provisions, hence noting changes in the key financial ratios and performance metrics.

Keywords: Lease accounting, Corporate reporting, Financial ratios, Performance Metrics International Financial Reporting Standards