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In this video, Sylvia from IFRSbox.com explains the basic method applied in the lease accounting under the new standard IFRS 16. Using a simple example of leasing cars, she shows how to calculate the right of use asset and lease liability at the commencement of the lease. The lessee does not classify the lease anymore, and the right of use asset is calculated as the amount of the lease liability plus lease payments before or on the commencement date. The lessee should recognize the right of use asset and lease liability for all leases according to IFRS 16.