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In this video tutorial by Sylvia from IFRSbox.com, the basic method applied in lease accounting under the newest standard IFRS 16 is explained. Using a simple example of car rentals, it discusses the calculation of 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 calculated as lease liability plus lease payments before or on commencement date minus lease incentives and lessee's initial costs.