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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 & Information Service also holds print versions of the IFRS standards. 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 guides and support

Factsheets and FAQs

IFRS 16 Leases πŸ”’
Financial Reporting Faculty, August 2019
This factsheet provides an overview of IFRS 16 with a focus on lessee accounting, including recognition, and right-of-use asset and liability measurement. It provides practical tips on implementation and answers some frequently asked questions.

IFRS 16 Leases
Financial Reporting Faculty, December 2019
This FAQ answers questions on IFRS 16 Leases, covering topics such as the lease accounting model, changes for lessors, disclosure requirements, transition arrangements, and the impact on financial statements.

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.

2019 IFRS accounts πŸ”’
Financial Reporting Faculty, 4 December 2019

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

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

Articles and features

IASB provides relief for COVID-19-related rent concessions
Insights: Viewpoints on the news, June 2020
Many lessors are providing rent concessions to lessees as a result of the Coronavirus pandemic. This article introduces the amendments to IFRS 16 Leases issued by the IASB to help lessees account for these changes.

IFRS 16 Leases - tackling the practicalities
By All Accounts, July 2019
Avni Mashru discusses the impact of bringing leases on balance sheet under IFRS 16.

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

Bitesize Briefing: COVID-19 and impairment of assets πŸ”’
Financial Reporting Faculty, June 2020
A short webcast, suitable for UK GAAP and IFRS reporters, outlining the accounting requirements for impairment of assets in the context of the pandemic.

IFRS 16 Leases - the impact πŸ”’
Financial Reporting Faculty, May 2019
This webinar looks at the impact of IFRS 16 Leases, its interaction with evolving business models and potential challenges for users.

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.


eBooks

Access to eBooks is only available to ICAEW members and ACA students – please log in to view these titles.

Leases πŸ”’
EY, International GAAP 2020 (2020)
The latest edition of this comprehensive guide offers a global perspective and explanations of complex technical accounting issues to help practitioners interpret and implement IFRS. It contains worked examples and illustrations from published financial reports of major listed companies from around the world. This chapter discusses IFRS 16.

If you have any difficulties using these eBooks, please see our Help and support advice or contact library@icaew.com.


Example accounts

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

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. Company Reporting analyses current IFRS disclosures from public companies, organised by industry sector. It also provides detailed monthly Common Practice reports on specific issues.

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


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.

IFRS 16 COVID-19 Related Rent Concessions Amendment
PwC, June 2020
In-depth guide following the amendment to IFRS 16 issued by the IASB in May 2020. The guide answers a range of frequently asked questions on the scope of the amendments, measurement, presentation and disclosure, transition and effective date. 

Application of IFRS 16 in the light of the covid-19 uncertainty
IASB, May 2020
Updated summary from the IASB highlighting its guidance on applying IFRS 16 to rent concessions (issued in April 2020) and the amendment issued in May 2020 to the standard.

Applying IFRS: A closer look at IFRS 16 Leases
EY, December 2019
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.

IFRS 16 Thematic Review: Review of Interim Disclosures in the First Year of Application
FRC, November 2019
Report with excerpts of published accounts illustrating good examples of disclosure and the FRC's key findings on transition to IFRS 16, changes to accounting policies, transition disclosures, significant judgements, disclosures, and comparability and use of alternative performance measures (APMs).

IFRS 16 ‘Leases’: Interaction with other standards
PwC, June 2019
Guide highlighting the impact of IFRS 16 on impairment of non-financial assets, financial instruments, taxes, and other areas.

IFRS 16 implications for lessors in the real estate industry
PwC, April 2019
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.

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. 


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

iGAAP 2019: A guide to IFRS reporting (Volume A)
Deloitte, Croner-i, 2019
Practical and comprehensive guidance for entities currently reporting under IFRS and those considering whether to move to IFRS in the near future.
Request this book by email

GAAP 2019: UK reporting – IFRSs (Volume C)
Deloitte, Croner-i, 2019
Comprehensive manual explaining how to apply IFRS, focusing on practical implementation issues with commentary and analysis of issues specific to UK companies.
Request this book by email

Insights into IFRS 2019–20
KPMG, Sweet and Maxwell, 2019
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.
Request this book by email

International GAAP 2019
EY, Wiley, 2019
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.
Request this book by email

Manual of accounting: IFRS for the UK 2019
PwC, Tolley, 2018
Practical guidance on the standards and the accounting requirements of UK law applicable to UK users of IFRS. The IFRS Supplement 2020 published in December 2019 brings the manual up to date for 2020; it includes a new chapter on insurance contracts under IFRS 17 and an updated chapter on leasing under IFRS 16.
Request this book by email

Wiley IFRS 2019: Interpretation and application of IFRS standards
PKF, Wiley, 2019
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 by email

Articles

The ICAEW Library subscribes to over 160 current journals and magazines, as well as offering access to 1,800 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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Get an opinion from the experts. Our experienced technical advisors can help you with your IFRS questions and offer practical advice. Call the advisory helpline on +44 (0)1908 248 250. 

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