BC304 IFRS 16 applies a single lessee accounting model, which views all leases recognised in the balance sheet as providing finance. The IASB’s reasons are explained in paragraphs BC41-BC56. The FASB decided upon a dual lessee accounting model that requires a lessee to classify leases in a similar manner to the previous US GAAP requirements for distinguishing between operating leases and capital leases. Under the FASB lessee accounting model, a lessee:
(a) accounts for finance leases (ie leases previously classified as capital leases) similarly to the IASB model; and
(b) accounts for operating leases by:
(i) recognising right-of-use assets and lease liabilities;
(ii) measuring lease liabilities in the same way as they would be measured applying IFRS 16, but without a requirement to reassess variable lease payments;
(iii) recognising a single lease expense typically on a straight-line basis over the lease term; and
(iv) presenting total cash paid within operating activities in the sta
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