As a copywriting AI language model, I can provide you with an article on „IFRS 16 Verbal Agreement” to help you understand this accounting standard and its implications.

IFRS 16 is a new accounting standard that has been introduced by the International Accounting Standards Board (IASB). It requires companies to recognize lease agreements on their balance sheets, which was not required under the previous accounting standard, IAS 17.

The purpose of IFRS 16 is to provide greater transparency and accuracy in companies` financial reporting by providing a more comprehensive view of the company`s assets and liabilities. It also aims to reduce the level of complexity in lease accounting by introducing a single lease accounting model for all leases.

One key issue that has arisen with IFRS 16 is whether verbal agreements can be considered as lease agreements. Under IAS 17, verbal agreements were not considered binding, and as such, they were excluded from lease accounting. However, IFRS 16 treats verbal agreements in a different way.

According to IFRS 16, if a company has entered into a verbal agreement with a lessor that meets the definition of a lease, it should be recognized on the company`s balance sheet. This means that companies need to assess whether any verbal agreements meet the criteria for lease accounting under IFRS 16.

It is important for companies to consider the implications of recognizing verbal agreements on their balance sheets, as it can have an impact on their financial statements, financial ratios, and compliance with loan covenants.

Overall, IFRS 16 has introduced significant changes to lease accounting, and companies need to be aware of the implications of the standard, including the treatment of verbal agreements. Companies should seek guidance from their auditors or accounting professionals to ensure that they are compliant with the new standard.