All leases result in a company (the lessee) obtaining the
right to use an asset at the start of the lease and, if lease
payments are made over time, also obtaining financing.
Accordingly, IFRS 16 eliminates the classification of
leases as either operating leases or finance leases as
is required by IAS 17 and, instead, introduces a single
lessee accounting model. Applying that model, a lessee
is required to recognise:
(a) assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is
of low value; and
(b) depreciation of lease assets separately from interest
on lease liabilities in the income statement