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IFRS 16 Leases

IFRS 16 Leases prescribes a single lessee accounting model that requires the recognition of asset and corresponding liability for all leases with terms over 12 months unless the underlying asset is of low value. Lessors continue to apply a two-model approach. The standard was published in January 2016 and is effective from 1 January 2019.

Full text standard

Unaccompanied version of IFRS 16
The International Accounting Standards Board (IASB) provides free access to the consolidated unaccompanied international accounting standards for the current year through its website. Free registration is required.

This unaccompanied version does not include additional content that accompanies the full standard, such as illustrative examples, implementation guidance and bases for conclusions.

IFRS 16 summary and timeline

Looking for the synopsis? Our IFRS 16 summary and timeline are now on a separate page, featuring information on current proposals and a timeline of IASB updates.

Which version of the standard?

Financial Reporting Faculty members have unlimited online access to the consolidated edition of IFRS and amendments through the IASB's eIFRS service. Please log into eIFRS to access electronic versions of the standards. Or find out more about how to join the faculty.

The ICAEW Library also offers members and students access to the print versions of the latest IFRS Blue and Red Books. Contact us by telephone on +44 (0)20 7920 8620, by web chat or by email at library@icaew.com


UK reduced disclosures

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Our FRS 101 page gives more information on which entities qualify and the criteria to be met.

Disclosure exemptions

Lessees

  • No requirement to disclose separate information about leases.
  • The exemption from the requirement to present a maturity analysis for lease liabilities in accordance with the requirements of IFRS 7 is available only when the entity provides a separate maturity analysis for lease liabilities in accordance with company law.

Lessors

  • No requirement to disclose profit or loss.
  • No requirement to provide explanations of significant changes in the net investment in finance leases.

ICAEW guidance and commentary

Factsheets and FAQs

Introducing IFRS 16 Leases πŸ”’
Financial Reporting Faculty, May 2017
The IASB issued IFRS 16 Leases in January 2016. The standard sets out principles for the recognition, measurement, presentation and disclosure of leases. This exclusive factsheet for Financial Reporting Faculty members provides an overview of IFRS 16 and answers some frequently asked questions about this new standard.

IFRS 16 Leases
Financial Reporting Faculty, March 2016
This FAQ answers members' initial questions on the IASB's new leases standard, covering topics such as the new lease accounting model, changes for lessors, disclosure requirements, transition arrangements, and the impact on different business sectors.

Annual factsheets

These exclusive factsheets, produced annually by the Financial Reporting Faculty for its members, highlight all new and modified requirements for preparers of IFRS accounts. Each annual edition focuses primarily on new requirements with mandatory application for preparers with periods beginning on or after 1 January of that year.

2018 IFRS Accounts πŸ”’
Financial Reporting Faculty, 6 August 2018

2017 IFRS Accounts πŸ”’
Financial Reporting Faculty, 30 April 2018

2016 IFRS Accounts πŸ”’
Financial Reporting Faculty, 30 January 2017

Articles and features

Leases πŸ”’
By All Accounts, July 2018
Jake Green of Grant Thornton details the practical challenges companies face in applying IFRS 16 Leases, including identifying all your leases, completeness of lease information, getting all the documentation, estimates, using the portfolio exemption, modifications and modelling and transition.

IFRS 16 Leases: Putting theory into practice πŸ”’
By All Accounts, July 2017
Special issue of the Financial Reporting Faculty's magazine focusing on IFRS 16, presenting views from the leading experts to help members plan for the changes ahead.

Credit where credit's due πŸ”’
Sam Holland, By All Accounts, July 2017
The author provides a rating agency's perspective on IFRS 16.

Business as usual? πŸ”’
Peter Westaway, By All Accounts, January 2017
The author looks at some of the challenges businesses are facing as they plan to implement the IASB’s new leasing standard.

A new lease of life? πŸ”’
Kathryn Donkersley, By All Accounts, July 2016
The author provides an overview of the IASB's long-awaited new leases standard.

The nightmare before Christmas? πŸ”’
Peter Hogarth, By All Accounts, January 2016
This article looks at some of the challenges that lie ahead as entities prepare to get to grips with the IASB's new leasing standard.

Webinars

IFRS Update June 2018 πŸ”’
Financial Reporting Faculty, 19 June 2018
This webinar provides a summary of new and revised standards applicable in 2018 and beyond. It looks at the lessons we can learn from those already implementing IFRS 9 and IFRS 15, the impact of IFRS 16 on 2018 financial statements, IFRS 17 for those who are not insurers, and other IFRS amendments and new IFRICs.

IFRS 16 Lease – making sense of the new standard πŸ”’
Financial Reporting Faculty, 26 July 2017
IFRS 16 is effective for annual periods beginning on or after 1 January 2019. As this date draws ever nearer, this webinar for Financial Reporting Faculty members will inform you of the standard’s key requirements before focusing on practical issues and implementation challenges.

The new IFRS on leases πŸ”’
Financial Reporting Faculty, 22 March 2016
IFRS 16 Leases was published on 13 January 2016. This webinar for Financial Reporting Faculty members will provide an overview of the new standard and how it will affect you.


Example accounts

IFRS checklists and model financial statements
Online disclosure checklists, general IFRS illustrative statements and compliance questionnaires collected by the ICAEW Library.

Best practice

Company Reporting (Croner-i)
The ICAEW Library can provide examples of real-life company reports to help keep you up-to-date with reporting practices and benchmark your financial reporting compliance. As well as extracts from reports filed by all major public companies, Company Reporting also offers weekly CR Monitor Reports detailing changes to reporting practice and a broader monthly CR Review.

Contact us on +44 (0)20 7920 8620, by web chat, or at library@icaew.com to get any documents from Company Reporting.

ICAEW and Financial Reporting Faculty members can also buy a personal discounted subscription to this product.


External resources

Some guides and comparisons that we link to may pre-date the latest amendments to this standard. While these resources contain useful information, please treat them with appropriate caution.

Applying IFRS: A closer look at IFRS 16 Leases
EY, December 2018
In-depth guide discussing key concepts of the standard, lessee accounting, lessor accounting, subleases,sale and leaseback transactions, business combinations, and transition issues. It includes a table showing key differences between IFRS 16 and IAS 17, and a table summarising the differences with US GAAP.

Applying IFRS: Presentation and disclosure requirements of IFRS 16 Leases
EY, November 2018
In-depth guide examining presentation in the primary financial statements, disclosures in the notes to the financial statements, and transition disclosures. The guide also includes extracts from EY's IFRS disclosure checklist.

Applying IFRS: Impairment considerations for the new leasing standard
EY, November 2018
In-depth guide examining the potential effects of IFRS 16 on impairment testing. It deals with impairment of right-of-use assets, testing groups of cash generating units for impairment, other factors, and transition methods.

IFRS 16 implications for lessors in the real estate industry
PwC, July 2018
In-depth guide exploring the impact of IFRS 16 on lessors. It focuses on lease payments, separating or combining components of a contract, subleases, sale and leaseback transactions, and lease modifications.

IFRS 16: Banking and capital markets industry supplement
PwC, June 2018
Guide highlighting key issues that could have significant impact for entities in the banking and capital markets sector transitioning to IFRS 16.

IFRS 16: A new era of lease accounting
Guide published by PwC giving an in-depth summary of the new standard with illustrative examples. Sections cover identifying a lease, lessee accounting, lessor accounting, sale and leaseback transactions, transition, comparison of IFRS 16 and IAS 17/IFRIC 4, and comparison of IFRS and US GAAP. In-depth supplements focusing on the pharmaceutical and life sciences industry, shipping industry, and retail and consumer industry are also available. Updated in March 2018.

Balancing the books: IFRS 16 and aviation finance
Detailed survey report produced by Deloitte in December 2017 exploring the operational impact, reporting impact and implementation of IFRS 16 within the aviation finance sector.


Further reading

Manuals and handbooks

The ICAEW Library stocks the latest IFRS handbooks and manuals. You can browse all our books on IFRS 16 and leasing or request any of the following popular titles by contacting us on +44 (0)20 7920 8620, by web chat, or at library@icaew.com

International Accounting/Financial Reporting Standards guide
David Alexander and Simon Archer, CCH, 2017
Handbook explaining the latest general and industry-specific international reporting standards (as published by the IASB at 1 September 2016), as well as proposed changes on the immediate horizon. The book features Practice Pointers throughout that describe in plain English how to apply the standards.
Request this book

Wiley IFRS 2017: Interpretation and application of IFRS standards
PKF, Wiley, 2017
Reference manual providing full coverage of the latest standards and thorough guidance for implementation, featuring practical tools and insight from a practitioner's perspective.
Request this book

International GAAP 2018
EY, Wiley, 2018
Comprehensive reference guide to interpreting and implementing IFRS, featuring detailed analysis of technical accounting issues accompanied by worked examples and illustrations taken from the actual financial statements of companies that report under IFRS. This manual deals with standards issued by the IASB up to September 2017.
Request this book

iGAAP 2018: A guide to IFRS reporting (Volume A)
Deloitte, Croner-i, 2018
Practical and comprehensive guidance for entities currently reporting under IFRS and those considering whether to move to IFRS in the near future. This manual deals with standards issued by the IASB as at 1 September 2017.
Request this book

GAAP 2018: UK reporting - IFRSs (Volume C)
Deloitte, Croner-i, 2018
Comprehensive manual explaining how to apply IFRS, focusing on practical implementation issues with commentary and analysis of issues specific to UK companies. This volume deals with standards issued by the IASB as at 1 September 2017.
Request this book

Insights into IFRS
KPMG, Thomson Reuters, 2017
Manual providing practical guidance with an emphasis on the real-life application of IFRS, with examples based on actual questions that have arisen in practice around the world. This book deals with standards issued by the IASB as at 1 August 2017.
Request this book

Manual of accounting: IFRS for the UK 2017
PwC, Lexis Nexis, 2016
Practical guidance on the standards and the accounting requirements of UK law applicable to UK users of IFRS. This manual deals with standards published by the IASB as at 31 December 2015.
Request this book

Articles

The ICAEW Library subscribes to over 250 current journals and magazines, as well as offering access to 3,000 key UK and international business, management and trade titles online. You can browse articles on IFRS 16 and leasing or request any of the selected articles below by contacting us on +44 (0)20 7920 8620, by web chat, or at library@icaew.com

Navigating leases – part 1
Danielle Stewart, Accountancy, May 2018
This article outlines 10 practical tips for lessees to help businesses prepare for changes to lease accounting rules under IFRS 16.

Find out more about how you can borrow books from the ICAEW Library or get articles and documents sent to you by email, post or fax.


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