Impracticability of split between land and buildings (para. BCZ248)
BCZ248 When amending IAS 17 in 2003, the IASB considered how to treat leases for which it is not possible to measure the two elements reliably (for example, because similar land and buildings are not sold or leased separately). One possibility would be to classify the entire lease as a finance lease. However, the IASB noted that it may be apparent from the circumstances that classifying the entire lease as a finance lease is not representationally faithful. In view of this, the IASB decided that when it is not possible to measure the two elements reliably, the entire lease should be classified as a finance lease unless it is clear that both elements should be classified as an operating lease. This requirement is now in paragraph B56 of IFRS 16.