Paper Title
Where are these Hidden Liabilities? IFRS 16 – A Case of Operating Lease

Leases are classified as finance leases or operating leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. According to current International Accounting Standard (IAS) 17- At the commencement of the lease term, lessees shall recognize finance leases as assets and liabilities in their balance sheets at the lower of the fair value of the asset and the present value of the minimum lease payments. While operating lease payments are recognized as an expense on income statement. International Accounting Standards Board (IASB) has developed a new Leases Standard, International Financial Reporting Standard (IFRS) 16-Leases., which supersedes International Accounting Standard (IAS) 17-Leases. IFRS 16 eliminates the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting. In this study differences between IAS 17 and IFRS 16 and one of the huge operating lease case from the world is examined and also after applying IFRS 16 the effects on the financial statements are revealed. Keywords- Accounting, Financial Lease, Operating Lease, IAS 17, IFRS 16