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In this video tutorial, Sylvia from ifrsbox.com explains the basic method for applying the latest accounting standard, IFRS 16. Using a simple example of leasing a car with four payments of 110,000 currency units in arrears, she discusses how the lessee should recognize the right of use asset and lease liability at the commencement of the lease. The incremental borrowing rate is also explained as an important factor in this process. Overall, IFRS 16 requires lessees to calculate the right of use asset based on the lease liability and lease payments.