
IFRS 16 Has A Significant Impact On Financial Reporting
IFRS 16, or International Financial Reporting Standard 16, is a standard issued by the International Accounting Standards Board (IASB) in 2016. It replaces the previous standard for lease accounting, IAS 17, and sets out the principles for recognizing, measuring, presenting and disclosing leases in financial statements.
IFRS 16 Requires Lessees to Initially Measure Lease Liability
Under IFRS 16 , all leases, with some exceptions, are recognized on the lessee's balance sheet as assets and liabilities. This means that lessees must recognize a right-of-use asset representing their right to use the leased asset, and a lease liability representing their obligation to make lease payments.
IFRS 16 requires lessees to initially measure the lease liability at the present value of the lease pay...