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IFRS 16: LeasesIntroduction (IN1-IN15)Objective (paras. 1-2)Scope (paras. 3-4)Recognition exemptions (paragraphs B3-B8) (paras. 5-8)Identifying a lease (paragraphs B9-B33) (paras. 9-17)Lease term (paragraphs B34-B41) (paras. 18-21)Lessee (paras. 22-60A)Lessor (paras. 61-97)Sale and leaseback transactions (paras. 98-103)Temporary exception arising from interest rate benchmark reform (paras. 104-106)Appendix A Defined termsAppendix B Application guidanceAppendix C Effective date and transitionAppendix D Amendments to other StandardsApproval by the Board of IFRS 16 Leases issued in January 2016Approval by the Board of Covid-19-Related Rent Concessions issued in May 2020Approval by the Board of Covid-19-Related Rent Concessions beyond 30 June 2021 issued in March 2021Approval by the IASB of Lease Liability in a Sale and Leaseback issued in September 2022IFRS 16: Basis for ConclusionsIntroduction (paras. BC1-BC2)Overview (paras. BC3-BC4)Why the need to change previous accounting? (paras. BC3-BC4)Background (paras. BC5-BC18)The approach to lease accounting (paras. BC19-BC40)BC19-BC21Rights and obligations arising from a lease that create assets and liabilities for the lessee (paras. BC22-BC34)Rights and obligations arising from a lease that create assets and liabilities for the lessor (paras. BC35-BC40)The lessee accounting model (paras. BC41-BC56)The lessor accounting model (paras. BC57-BC66)Scope (paragraphs 3-4) (paras. BC67-BC81)BC67-BC68Service concession arrangements (para. BC69)Intangible assets (paras. BC70-BC71)Onerous contracts (para. BC72)Subleases (para. BC73)Inventory (para. BC74)Non-core assets (paras. BC75-BC77)Long-term leases of land (paras. BC78-BC79)Leases of investment property at fair value (para. BC80)Embedded derivatives (para. BC81)Portfolio application (paragraph B1) (paras BC82-BC83)Materiality (paras. BC84-BC86)Recognition exemptions (paragraphs 5-8) (paras. BC87-BC104)Short-term leases (paras. BC87-BC97)Leases of low-value assets (paras. BC98-BC104)Identifying a lease (paragraphs 9-17) (paras. BC105-BC140)Definition of a lease (paragraphs 9-11) (paras. BC105-BC126)Cancellable leases (paras. BC127-BC129)Combination of contracts (paragraph B2) (paras. BC130-BC132)Separating components of a contract (paragraphs 12-17 and B32-B33) (paras. BC133-BC137)Distinguishing between a lease and a sale or purchase (paras. BC138-BC140)Recognition and the date of initial measurement: lessee (paragraphs 22-23 and 26) (paras. BC141-BC144)Inception versus commencement of a lease (paras. BC141-BC144)Measurement: lessee (paragraphs 23-46B) (paras. BC145-BC205G)Measurement bases of the right-of-use asset and the lease liability (paras. BC145-BC146)Initial measurement of the right-of-use asset (paragraphs 23-25) (paras. BC147-BC151)Initial measurement of the lease liability (paras. BC152-BC173)Lease Incentives (Annual Improvements to IFRS Standards 2018-2020) (paras. BC173A-BC173B)Subsequent measurement of the right-of-use asset (paragraphs 29-35) (paras. BC174-BC181)Subsequent measurement of the lease liability (paragraphs 20-21 and 36-43) (paras. BC182-BC199)Lease modifications (paragraphs 44-46B) (paras. BC200-BC205G)Presentation: lessee (paragraphs 47-50) (paras. BC206-BC211)Statement of financial position (paragraph 47-48) (paras. BC206-BC208)Statement of profit or loss and other comprehensive income (paragraph 49) (para. BC209)Statement of cash flows (paragraph 50) (paras. BC210-BC211)Disclosure: lessee (paragraphs 51-60) (paras. BC212-BC230)BC212-BC214Overall disclosure objective (paragraph 51) (paras. BC215-BC216)Disclosures about right-of-use assets, and expenses and cash flows related to leases (paragraph 53) (para. BC217)Maturity analysis (paragraph 58) (paras. BC218-BC223)Additional disclosures (paragraph 59) (paras. BC224-BC227)Presentation of lessee disclosures in the notes to the financial statements (paragraphs 52 and 54) (para. BC228)Other approaches considered for lessee disclosure (paras. BC229-BC230)Lessor: accounting (paragraphs 61-97) (paras. BC231-BC240A)BC231Subleases (paras. BC232-BC236)Initial direct costs (paragraphs 69 and 83) (para. BC237)Lease modifications (paragraphs 79-80 and 87) (paras. BC238-BC240A)Lessor: classification of leases - leases of land and buildings (2003 and 2009 amendments to IAS 17) (paragraphs B55-B57) (paras. BCZ241-BCZ250)Land element in long-term leases (paras. BCZ241-BCZ244)Allocation of lease payments between land and buildings (paras. BCZ245-BCZ247)Impracticability of split between land and buildings (para. BCZ248)Exception to the requirement to separate the land and buildings elements (paras. BCZ249-BCZ250)Lessor: disclosure (paragraphs 89-97) (para. BC251-BC259)BC251Table of income (paragraphs 90-91) (para. BC252)Information about residual asset risk (paragraph 92(b)) (paras. BC253-BC255)Information about assets subject to operating leases (paragraphs 95-96) (para. BC256)Maturity analyses (paragraphs 94 and 97) (paras. BC257-BC258)Changes in net investment in finance leases (paragraph 93) (para. BC259)Sale and leaseback transactions (paragraphs 98-103) (paras. BC260-BC267J)BC260When a sale occurs (paras. BC261-BC265)Gain or loss on a sale and leaseback (paras. BC266-BC267)Subsequent measurement (paras. BC267ZA-BC267ZF)Temporary exception arising from interest rate benchmark reform (paras. BC267A-BC267J)Effective date and early application (paragraph C1) (paras. BC268-BC272)Transition (paragraphs C2-C20E) (paras. BC273-BC294A)Definition of a lease (paragraphs C3-C4) (paras. BC273-BC274)Lessees (paragraphs C5-C13) (paras. BC275-BC288)Lessors (paragraphs C14-C15) (paras. BC289-BC291)Sale and leaseback transactions before the date of initial application (paragraphs C16-C18) (paras. BC292-BC294)Lease liability in a sale and leaseback (paragraph C20E) (para. BC294A)Consequential amendments (paras. BC295-BC302)Investment property (para. BC295)Business combinations (paras. BC296-BC298)Transition for first-time adopters of IFRS (para. BC299-BC302)Comparison with FASB decisions (para. BC303-BC310)BC303Lessee accounting model (paras. BC304-BC307)Recognition exemption for leases of low-value assets (para. BC308)Reassessment of variable lease payments (para. BC309)Lessor accounting (para. BC310)Dissenting OpinionsAppendix - Amendments to the Basis for Conclusions on other StandardsIFRS 16: Illustrative Examples
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Version date: 26 February 2020 - onwards

Subleases (para. BC73)

(paragraphs 3-4)

BC73 The IASB decided that an entity should account for leases of right-of-use assets (ie subleases) in the same way as other leases. Accordingly, subleases are within the scope of IFRS 16 (see paragraphs BC232-BC236).

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