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In this video tutorial, Sylvia from IFRSbox.com discusses the basic method applied in lease accounting under the new standard IFRS 16. Using a simple example of a car lease, she explains the calculation of right-of-use asset and lease liability. The lessee should recognize the right-of-use asset and lease liability at the commencement of the lease, with exceptions. The right-of-use asset is calculated as the amount of the lease liability plus lease payments before or on the commencement date, less lease incentives and lessee's initial expenses.