Final answer:
The IFRS standard for leases is IFRS 16, which requires the recognition of assets and liabilities for all leases on the balance sheet and improves the reporting and presentation of lease transactions.
Step-by-step explanation:
The IFRS standard for leases is IFRS 16. This standard was issued by the International Accounting Standards Board (IASB) and became effective for annual reporting periods beginning on or after January 1, 2019. The objective of IFRS 16 is to report information that faithfully represents lease transactions and provides a basis for users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. It replaces the previous lease standard, IAS 17, and introduces a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value.
Under this standard, a lessee records a right-of-use asset and a corresponding lease liability on the balance sheet. The right-of-use asset represents the lessee's right to use the leased asset, and the lease liability represents the obligation to make lease payments. IFRS 16 also changes the way lessees and lessors report and present information about leases in the financial statements. Essentially, it provides a more faithful representation of an entity's assets and liabilities and improves comparability among entities.