IFRS 16 Leases IFRS Lectures Finance Lease International Counteracting ACCA Exam default

What is IFRS 16 leases? This video explains the IFRS 16 single lessee accounting model — recognizing a right-of-use asset and lease liability, the accounting treatment, and the key differences from US GAAP ASC 842 — taught by Professor Farhat for CPA candidates and accounting students in advanced accounting and the FAR section. Try it free at farhatlectures.com — interactive exercises, lectures, simulations, cases, multiple choice, and AI tools for CPA, CMA, EA and students. Professor Farhat explains how IFRS 16 ended off-balance-sheet operating leases, requiring lessees to record a right-of-use asset and lease liability, splitting expense into depreciation and interest, and how IFRS differs from US GAAP which retains the operating lease category. Video Timeline & Key Concepts: 0:00 — Introduction 1:37 — Background on operating leases 5:45 — The IFRS 16 single lessee model 11:07 — Accounting treatment with an example 15:17 — IFRS 16 versus US GAAP 21:05 — Financial statement impact and disclosures Frequently Asked Questions: What does IFRS 16 require lessees to record? IFRS 16 requires lessees to recognize a right-of-use asset and a corresponding lease liability for virtually all leases longer than twelve months. How did operating leases work before IFRS 16? Under the old model, operating leases were kept off the balance sheet and recorded as rent expense, which allowed off-balance-sheet financing. How is lease expense recognized under IFRS 16? Instead of a single straight-line rent expense, the cost is split into depreciation of the right-of-use asset and interest on the lease liability. How does IFRS 16 differ from US GAAP? Both require balance sheet recognition, but US GAAP retains a separate operating lease classification for presentation, while IFRS 16 uses a single model. How are lease payments shown on the cash flow statement? Lease payments are split into principal, reported as financing, and interest, usually reported as operating, on the statement of cash flows. #CPAexam #CMAexam #enrolledagentexam #accountingcourses #collegecourses #courses #FAR #leases #IFRS16 #rightofuseasset #advancedaccounting #ProfessorFarhat