What is IFRS16? Why it came in picture?

Question

Accepted Answer

IFRS16 is an accounting standard that requires companies to report lease obligations on their balance sheets.

IFRS16 stands for International Financial Reporting Standard 16.
It was introduced by the International Accounting Standards Board (IASB) in 2016.
It replaces the previous lease accounting standard, IAS 17.
IFRS16 requires lessees to recognize lease assets and liabilities on their balance sheets.
It aims to provide a more accurate representation of a company's financial position and performance.
Under IFRS16, companies must classify leases as either finance leases or operating leases.
Finance leases are recognized as assets and liabilities, while operating leases are disclosed in the footnotes.
The standard also introduces new requirements for lease disclosures and lease accounting policies.
IFRS16 came into picture to address the issue of off-balance sheet financing, where companies were able to keep significant lease obligations hidden from investors and stakeholders.
By bringing lease obligations onto the balance sheet, IFRS16 enhances transparency and comparability in financial reporting.

Accepted Answer

Have a proper idea about IFRS16 and how it is implemented in REFX

Top Capgemini Marketing Consultant interview questions & answers