This essay comprehensively analyzes the impact of AASB (IFRS) 16, the new leasing standard, on financial reporting, using Wesfarmers Limited as a case study. The study explores the differences between AASB 16 and its predecessor, AASB 117, emphasizing the requirement for lessees to recognize right-of-use assets and lease liabilities. It examines the implications of the new standard on financial statements, including balance sheets, income statements, and cash flow statements. The essay details the impact on Wesfarmers, including the reclassification of operating leases and the effects on key financial metrics and gearing ratios. It also addresses the broader implications for the Australian retail industry, including the lifecycle and stages of leases. The essay concludes by highlighting the benefits of AASB 16, such as enhanced financial reporting transparency, while acknowledging the associated implementation costs for organizations.