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This video tutorial is about the basic method applied in lease accounting under IFRS 16. The example provided involves a lessee renting cars and making payments in arrears, with an incremental borrowing rate of four percent per annum. IFRS 16 requires the lessee to recognize the right of use asset and lease liability at the commencement of the lease, based on lease payments and incentives. The classification of the lease is no longer relevant in this context.
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