Brief me about IND AS 116? Why standard was introduced?

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IND AS 116 is a new accounting standard introduced to bring consistency in lease accounting.

IND AS 116 stands for Indian Accounting Standard 116.
It replaces the previous standard, IND AS 17, and aligns with the International Financial Reporting Standards (IFRS) 16.
The standard was introduced to address the issue of off-balance sheet financing and provide a more accurate representation of a company's financial position.
Under IND AS 116, lessees are required to recognize most leases on their balance sheets as right-of-use assets and lease liabilities.
This eliminates the distinction between operating and finance leases, resulting in increased transparency and comparability in financial statements.
The standard also requires lessees to provide additional disclosures about their leasing activities.
IND AS 116 was introduced to improve the quality and relevance of financial reporting, enhance comparability across companies, and provide users of financial statements with more useful information for decision-making.
It became effective for annual reporting periods beginning on or after April 1, 2019, for Indian companies.

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