After reviewing the IFRS 16 and realizing the following issues:The new regulation of IFRS 16 specifies how to recognize, measure, present and disclose leases. The standard requiring lessees to recognize assets and liabilities for almost all leases unless the lease term is 12 months or less or the underlying asset has a low value. The standard is mandatory for annual periods beginning of or after January 1, 2019 with early application permitted. Currently operational leases are reported off balance sheet while financial leases are reported on balance sheet. The absence of information about operational leases on balance sheet has meant that investors and analysts are unable to properly compare companies that borrow to buy assets with those that lease assets without making adjustments. The implementation of IFRS 16 will not mean any significant accounting changes for the lessors. But as we aware of price transparency will increase which could trigger greater competition between lessors and potentially may leading to price reductions.Some companies suddenly will be facing currency risk issue for firms that had operating leases in foreign currencies. Hence, it is not the debt increases itself that is the issue but rather the financial risk of specifically foreign risk.The EBITDA will increase as operating leasing costs, such as rent, are removed from EBITDA and are instead recognised in the P&L under depreciation. In general industry sectors that are major users of off balance sheet leases, such as airlines and retailers, we expect the increase in EBITDA margins to be significant. Debt will increase, as lessees will recognise the present value of lease payments over the lease term as a lease liability on the balance sheet at inception. Companies such as airlines with large and long-term lease commitments will see the largest balance sheet expansion. These companies websites below that have early adoption of regulation IFRS 16:====================================================================================1. http://www.borzamalta.com.mt/download/announcements/MDS165.pdfEarly Adoption of IFRS 15 and IFRS 16 – Pg 1/22. https://www.nestle.com/asset-library/documents/library/documents/financial_statements/2016-financial-statements-en.pdfConsolidated Financial Statements of the Nestle Group 2016 – Pg 69/1203.http://www.airfranceklm.com/sites/default/files/124_afklm_consolidated_financial_statement_2017.pdfAir France-KLM Group- Pg 15/99
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