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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: 31 March 2021 - onwards

Approval by the Board of Covid-19-Related Rent Concessions beyond 30 June 2021 issued in March 2021

Covid-19-Related Rent Concessions beyond 30 June 2021, which amended IFRS 16, was approved for issue by 11 of 13 members of the International Accounting Standards Board. Messrs Anderson and Gast dissented. Their dissenting opinion is set out after the Basis for Conclusions.

Hans Hoogervorst                              Chairman

Suzanne Lloyd                                   Vice-Chair

Nick Anderson

Tadeu Cendon

Martin Edelmann

Françoise Flores

Zachary Gast

Jianqiao Lu

Bruce Mackenzie

Thomas Scott

Rika Suzuki

Ann Tarca

Mary Tokar

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