One of the major areas that gives rise to off balance sheet financing is leasing.

a) Explain the impact of leasing transaction on the financial statements of the lessee according to the current accounting standard for leasing (IAS 17). Support your answer with an appropriate numerical example.

b) At the beginning of 2016, IASB issued a new standard (IFRS 16) on leasing accounting. Explain the reasons behind this decision and the impact on companies financial statements.