Effective 2019, the new accounting standard on leasing, AASB16 Leases, will replace the existing leases standard, AASB117. It will remove the classification of leases that has been used for decades and which divides leases into operating and financial leases from the perspective of lessees. The new standard requires leases that were formerly known as operating leases (and were kept off balance sheet) to be recognised for balance sheet proposes (both an asset and a liability will be recognised).
2) The changed standard requires leases with either a short term or a long term to appear on the balance sheet. Discuss whether this new approach is consistent or inconsistent with the definitions of assets and liabilities included within the IASB Conceptual Framework.