IFRS for lease accounting

Question

Accepted Answer

IFRS 16 is the new lease accounting standard that requires lessees to recognize most leases on their balance sheets.

IFRS 16 eliminates the distinction between operating and finance leases for lessees, requiring them to recognize all leases on their balance sheets as liabilities with corresponding assets.
Lessees must calculate the present value of lease payments and recognize a right-of-use asset and lease liability on the balance sheet.
The standard also introduces new disclosure requirements to provide more transparency about lease obligations.
IFRS 16 has a significant impact on financial ratios and key performance indicators, as lease liabilities and assets must be included on the balance sheet.
Companies need to carefully assess the impact of IFRS 16 on their financial statements and ensure compliance with the new standard.

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