In 2016, IFRS 16 was introduced to result in a more accurate representation of a company’s assets and liabilities and greater transparency about the company’s financial leverage and capital position.
Since it became effective as of January 1 2019, it has reduced the information difference between the balance sheet and the notes to the financial statements, as well as helped to improve comparisons between companies that lease assets and those that borrow to buy. As a result, it is designed to create a more level playing field in providing information about leases to market participants.
But, now, several years in, is this the reality? What benefits have resulted from the introduction of IFRS 16? And what value can we expect to get out of this standard in the future?
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