What is IFRS16?

IFRS 16 Leases is an international accounting standard that specifies how to account for leases. It requires companies to recognize most leases on their balance sheets as assets (right-of-use assets) and liabilities (lease liabilities), reflecting the obligation to make lease payments. This provides a more complete picture of a company's financial obligations and assets. Exceptions are provided for short-term leases (12 months or less) and leases of low-value assets, where the lessee can elect to apply a simplified approach.