IFRS 16 Leases

IFRS 16 Leases

Our expert team can help you understand IFRS 16 and develop the processes to effectively apply it. We will carry out a robust and independent impact assessment. We want you to be confident you are taking all the necessary steps to comply with IFRS 16.

We can also provide advice and guidance on any aspects of IFRS 16 that may be of particular concern.

Please get in touch to discuss how we can help.

For further details of how BDO can help, visit our financial reporting solutions page.
 

IFRS 16 Leases information and guidance

BDO has prepared a range of useful information and guidance to assist you and your business to apply IFRS 16 and manage its implications.
 

Key facts

IFRS 16 does not distinguish between operating and finance leases for lessees. Instead, a lessee must recognise all leases within the scope of IFRS 16 (other than those for which the short term or low value exemptions have been taken) on its balance sheet, showing an asset for the right to use the underlying asset and a liability for the discounted amount of future payments.

A lessor applying IFRS 16 continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

Amendments to IFRS 16

Details of the amendments can be found on the IASB's website. Our publications summarise these amendments and answer dozens of questions regarding these amendments.

• On 28 May 2020, the IASB issued amendments to IFRS 16, which provide relief for lessees in accounting for rent concessions granted as a direct consequence of COVID-19.
• On 31 March 2021, the IASB amended IFRS 16 further to extend the time limit for one of the criteria that must be met in order for a lessee to apply the practical expedient to a rent concession.
• On 22 September 2022, the IASB issued amendments to IFRS 16 – Lease Liability in a Sale and Leaseback

IFRS 16 publications

• IFRS at a Glance – IFRS 16 Leases
  A short ‘key facts’ document, setting out the key requirements for both lessees and lessors under IFRS 16, the key application guidance, key definitions and disclosures
• IFRS in Practice 2024/25: IFRS 16 Leases
  This guidance looks at the scope of IFRS 16 and the required accounting for both lessees and lessors in detail, and the impact of IFRS 16 in practice, including a number of examples