1. Accounting, Auditing, Actuarial
  2. IFRS Foundation & IASB
  3. International Financial Reporting Standards (IFRSs)
  4. 2020
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  1. IFRS 16: Leases
  2. IFRS 16: Basis for Conclusions
  3. Lessor: classification of leases - leases of land and buildings (2003 and 2009 amendments to IAS 17) (paragraphs B55-B57) (paras. BCZ241-BCZ250)
  4. Impracticability of split between land and buildings (para. BCZ248)
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Version date: 26 February 2020 - onwards
    Version 1 of 1    

Impracticability of split between land and buildings (para. BCZ248)

(paragraphs B55-B57)

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.

Comparing proposed amendment...
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