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Lets understand lessee accounting in a way that makes sense. Your business needs a Boeing 737 for three years. Now, it doesnt make sense to purchase a huge asset, an airplane, just for three years. So you choose to lease it instead you have to make a payment of hundred dollars at the end of every year for three years. The question is how should we account for this transaction in ance with IFRS 16. Now, before IFRS 16 we had to decide whether a lease is a finance lease or an operating lease, for both the lessee and lessor. But under IFRS 16 a Lessee has to treat all leases as finance leases. There can be no operating lease except for low-value items and leases with a term of less than one year. Now, thats a drastic change which results in the recognition of right of use asset for almost all leases in the books of the lessee. Which means Im required to recognize an asset which I literally do not own. Why does it make sense? Lets say these apple slices represent the remaining useful