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IFRIC 4 — Determining Whether an Arrangement Contains a Lease

Effective date:

First effective as Canadian GAAP under Part I for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.  Earlier application of Part I was permitted.

Published by IASB:

December 2004

Included in Part I of CPA Canada Handbook:

January 2010


An entity may enter into an arrangement, comprising a transaction or a series of related transactions, that does not take the legal form of a lease but conveys a right to use an asset (e.g., an item of property, plant or equipment) in return for a payment or series of payments. Examples of arrangements in which one entity (the supplier) may convey such a right to use an asset to another entity (the purchaser), often together with related services, include:

  • outsourcing arrangements (e.g., the outsourcing of the data processing functions of an entity).
  • arrangements in the telecommunications industry, in which suppliers of network capacity enter into contracts to provide purchasers with rights to capacity.
  • take-or-pay and similar contracts, in which purchasers must make specified payments regardless of whether they take delivery of the contracted products or services (e.g., a take-or-pay contract to acquire substantially all of the output of a supplier's power generator).

This Interpretation provides guidance for determining whether such arrangements are, or contain, leases that should be accounted for in accordance with IAS 17 Leases. It does not provide guidance for determining how such a lease should be classified under that Standard.

History of IFRIC 4

The following table shows the history of this standard subsequent to the adoption of IFRS in Canada.




Included in Part I of the CPA Canada Handbook2

January 2010

Part I of the CPA Canada Handbook issued

Effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier application is permitted.

January 2010


  1. For further details of relevant developments prior to this, please refer to our Deloitte Global section.
  2.  Newly issued, amended or revised IFRSs are part of Canadian GAAP only after they are approved by the Accounting Standards Board in accordance with its due process.
The above summary does not include details of consequential amendments made as the result of other projects.

Related Standards

Amendments under consideration

  • None

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.