What is IFRS 16?

IFRS 16 Leases is an international accounting standard that specifies how leases should be recognized, measured, presented, and disclosed in the financial statements of both lessees and lessors. It primarily impacts lessees by requiring them to recognize most leases on their balance sheet as assets (right-of-use assets) and lease liabilities, replacing the previous distinction between operating and finance leases. This provides a more accurate representation of a company's financial obligations and improves comparability between companies.