BC275 The IASB decided that, on transition, a lessee should apply IFRS 16 using either of the following methods:
(a) retrospectively to each prior reporting period presented applying IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; or
(b) retrospectively with the cumulative effect of initially applying IFRS 16 recognised as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) of the annual reporting period that includes the date of initial application. The IASB decided that, applying this approach, a lessee is permitted to apply some optional practical expedients on a lease-by-lease basis (see paragraphs BC282-BC287).
BC276 The IASB decided not to require a full retrospective approach for all lessees because the costs of such an approach could be significant and would be likely to outweigh the benefits. A full retrospective approach would require entities to determine the carrying amounts of a
…