How does IFRS 16 handle operating leases in PPA, and what does it mean for the combined balance sheet?

Under IFRS 16, most leases are already recognized as right-of-use assets and lease liabilities. In PPA, lease terms are assessed at market, and favorable or unfavorable lease terms may create identifiable intangible assets or liabilities. The combined balance sheet includes RoU assets and lease liabilities, increasing both assets and debt-like liabilities. EBITDA also changes because rent is split into D&A and interest.