ICAEW.com works better with JavaScript enabled.

SIC 27 Evaluating the Substance of Transactions in the Legal Form of a Lease

Published December 2001. Effective 31 December 2001.

Withdrawn for periods starting on or after 1 January 2019 when SIC 27 is superseded by IFRS 16 Leases.

Become a Financial Reporting Faculty member

Find out more about the benefits of membership and joining details.

Join now


Free to view

Financial Reporting Faculty members only

Looking for real life examples?

Financial Reporting Faculty members get free access to Company Reporting’s CR service. Company Reporting are a leading research and benchmarking service on IFRS reporting practices.

Faculty membership gives you access to a range of other resources, including the hidden premium content on this page.


An entity may enter into a transaction or number of transactions which involve the legal form of a lease.

Where there are a number of linked transactions and the overall economic effect cannot be understood without reference to all transactions, these should be accounted for as one transaction.

SIC 27 requires that accounting for these transactions must reflect the substance of the arrangement.

If the arrangement does not meet the definition of a lease, SIC 27 provides guidance on how it should be accounted for.

Which version of the interpretation?

'Which version of the interpretation?' is only available to members of the Financial Reporting Faculty. Please note that to access electronic versions of IFRS through the links in these standard trackers you need to have first logged into eIFRS.

Annual period starts
Effective version of standard
Notes on amendments 
1 January 2018 - 31 December 2018 SIC 27 2018 Required Standards 
Includes amendments 1 and 2
1 January 2017 – 31 December 2017 SIC 27 2017 Required Standards
Does not include any amendments

Required Standards book for a particular year assumes that there is no early application of issued but not yet effective IFRSs; The Issued Standards book assumes early application of all issued IFRSs.

For the latest version of the interpretation, and where amendments (including IFRS 9) are to be adopted early, refer to SIC 27 2018 Required Standards.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

  1. IFRS 9 amendment to SIC 27
  2. IFRS 15 Revenue from Contracts with Customers amendment to SIC 27