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In this video tutorial, Sylvia from IFRSBox.com explains the basic method of accounting under the new standard IFRS 16. Using a simple example of leasing cars, she demonstrates how to calculate the right of use asset and lease liability at the commencement of the lease. The lessee no longer classifies the lease, and the right of use asset is determined by the lease liability, lease payments, and lease incentives. The lessee should recognize these amounts at the beginning of the lease according to IFRS 16.
