About the standard

IFRS 16 provides a comprehensive guide for identifying lease arrangements and how it should be used in financial statements for both the lessees and lessors. Specifically, it introduces significant changes to lessee accounting since it removes the distinction between operating and finance leases from IAS 17.

IFRS 16 specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, unless the lease term is 12 months or less or the underlying asset has a low value. Lessor accounting however remains largely unchanged from IAS 17 and the distinction between operating and finance leases is retained.

The standard is effective for annual reporting periods beginning on or after January 1, 2019. Earlier application is permitted, if IFRS 15, Revenue from Contracts with Customers, has also been applied.

Why should you use this page?

On this page, find a summary of IFRS 16, including its effective date and implementation considerations.

Use this page to:

• Find out how to draft your financial statements and note disclosures for IFRS 16;
• Learn about the new IFRS 16 lease accounting standard and discover what businesses can do to prepare for its implementation;
• Find out how it impacts leases;
• Find practical examples and use cases;
• Find out how to make transitions from IAS 17 to IFRS 16, and the new exemptions under IFRS 16, including accounting entries examples and how they impacts sales and leasebacks.

Our selection of resources will help answer some of your questions:

• What’s included in the new standard?
• What do I need to disclose?
• What action items do I need to take to implement the new standard?
• What is the effective date and transitional provisions of this standard?

Reach out to our IFRS 16 specialist