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Lease Accounting

Nick Vermeulen
Ifrs , Leases

Key Points Lease accounting under IFRS, specifically IFRS 16, requires recognizing most leases on the balance sheet, impacting financial reporting. Key calculations involve measuring lease liabilities and right-of-use assets, using inputs like future payments and discount rates. The evidence leans toward a comprehensive list of inputs, including payment details, costs, and asset life, though complexity arises with variable terms. Overview of Lease Accounting Under IFRS Lease accounting under IFRS is governed by IFRS 16, effective since 2019, which changed how companies report leases. It requires lessees to recognize assets and liabilities for leases over 12 months, unless the asset is of low value, moving away from previous off-balance sheet treatment for operating leases. This shift aims for transparency, showing lease obligations clearly on financial statements.