CRITICAL THINKING

Assume that your class team has been assigned to the AASB 16 Transition project in a ASX500 listed company that heavily relies on operating leases at the moment. At present, it does not disclose any lease obligations on its balance sheet (as allowed under AASB 117).

Required

Using the AREA framework to prepare for the meeting with your class team, identify and discuss the effects of the release of IFRS 16 and subsequently AASB 16 for the company (Analyse & Research). In class, work out a strategy with your team for preparing the company for lease reporting under AASB 16. You may make any assumptions about the company, as you see fit (Evaluate & Answer).

ANALYSE (30 50 words)

Identify the issue and why it matters. Determine what you need to find out.

RESEARCH (300 words)

Discuss relevant facts and evidence, or issues.

EVALUATE & ANSWER (50 100 words)

Provide your opinion based on your discussion of relevant facts, evidence, or issues.