IFRS 16 resources

Whilst leases do not feature in the Financial Reporting Councils (FRC's) top ten findings for 2022/23, the FRC's previously issued IFRS 16 thematic, sets out the FRC's expectations for high-quality reporting in this area and highlights those areas where improvements to reporting quality have been identified in the past. The FRC expects to see:

Accounting policies tailored to the company’s specific circumstances, covering all material aspects of leasing arrangements (eg accounting for non-lease
components, sale and leaseback transactions and the company’s activities as a lessor).
Disclosure clearly explaining the significant judgements made by management (particularly to determine the lease term) and estimation uncertainty.
Adequate presentation of leasing arrangements in primary statements
Sufficient level of qualitative and quantitative information in respect of the company’s leasing arrangements and their financial effects.
Material balance sheet movements in right of use assets and lease liability balances explained.
Clear explanation of the circumstances in which the interest rate implicit in the lease can be determined.
European Securities and Markets Authority guidelines being followed for alternative performance measures (APMs) presented.

This page includes all of our resources on IFRS 16. It includes links to:

IFRS 16 resources

A Closer Look — Financial instrument disclosures when applying Interest Rate Benchmark Reform – Phase 1 amendments to IFRS 9 and IAS 39 and Phase 2 amendments to IFRS 9, IAS 39, IFRS 4 and IFRS 16

02 Dec, 2020

This publication addresses financial instrument disclosures when applying the IBOR amendments.

IASB publishes proposed amendment to IFRS 16

27 Nov, 2020

The International Accounting Standards Board (IASB) has published an exposure draft 'Lease Liability in a Sale and Leaseback (Proposed amendment to IFRS 16)' that aims at clarifying how a seller-lessee should apply the subsequent measurement requirements in IFRS 16 to the lease liability that arises in a sale and leaseback transaction. Comments are requested by 29 March 2021.

We comment on the tentative agenda decision on sale and leaseback in a corporate wrapper

24 Nov, 2020

We have commented on the IFRS Interpretations Committee's publication in the September 2020 'IFRIC Update' of the tentative decision not to take onto the Committee’s agenda the request for clarification on the applicability of the sale and leaseback requirements in IFRS 16 to a transaction in which an entity sells its equity interest in a subsidiary that holds one asset and leases that asset back.

Deloitte comment letter on the tentative agenda decision on sale and leaseback in a corporate wrapper

24 Nov, 2020

We agree that the IFRS Interpretations Committee’s conclusions as laid out in the agenda decision reflect the requirements of IFRS 10 and IFRS 16 in relation to the specific fact pattern presented therein. However, we strongly suggest that in addition to this decision the Board takes on a broader project to address the treatment of the sale of corporate wrappers, in particular when, if ever, these should be accounted for as sales of assets rather than subsidiaries.

FRC issues advice on annual reports for 2019/20 reporting season Image

Governance in brief - FRC issues advice on annual reports for 2020/21 reporting season

23 Nov, 2020

FRC issues advice on annual reports for 2019/20 reporting season

EFRAG publishes its feedback statement on its comment letter to the IASB's exposure draft on Interest Rate Benchmark Reform - Phase 2

20 Nov, 2020

The European Financial Reporting Advisory Group (EFRAG) has finalised the steps in its due process and published its feedback statement on the draft comment letter to the International Accounting Standard Board's (IASB's) ED/2020/1 'Interest Rate Benchmark Reform - Phase 2: Proposed Amendments to IFRS 9, IAS 39, IFRS 4 and IFRS 16'.

FRC publishes year-end advice to Audit Committee Chairs and Finance Directors in advance of the 2020/21 reporting season

14 Nov, 2020

The Financial Reporting Council (FRC) has published a letter to Audit Committee Chairs and Finance Directors, in advance of the 2020/21 reporting season, setting out its expectations for preparers of reports and accounts for the coming year.

EFRAG endorsement status report 6 November 2020

06 Nov, 2020

The endorsement status report has been updated to reflect that EFRAG has published draft endorsement advice on 'Classification of Liabilities as Current or Non-current' and 'Deferral of Effective Date (Amendments to IAS 1)'. The updated report also reflects positive ARC votes on amendments to IFRS 4 regarding the deferral of IFRS 9 and on the IBOR reform amendments phase 2.

ESMA announces enforcement priorities for 2020 financial statements

28 Oct, 2020

The European Securities and Markets Authority (ESMA) has announced the priority issues that the assessment of listed companies' 2020 financial statements will focus on. A special focus is on COVID-related matters.

EFRAG endorsement status report 23 October 2020

23 Oct, 2020

The endorsement status report has been updated to reflect that EFRAG has issued endorsement advice on amendments of IFRS 1, IFRS 3, IFRS 9, IAS 16, IAS 37 and IAS 41. Final endorsement of the amendments is currently expected in the second half of 2021.

FRC publishes findings on the quality of corporate reporting in 2019/2020

21 Oct, 2020

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2019/2020, which provides the FRC's assessment of corporate reporting in the UK based on evidence from a variety of sources, including the work of the FRC's own Corporate Reporting Review (CRR) team. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and what it expects companies to focus on in the coming reporting season. The FRC expects companies to consider its findings during the financial reporting process.

EFRAG issues final endorsement advice on amendments to the interest rate benchmark reform - Phase 2

12 Oct, 2020

The European Financial Reporting Advisory Group (EFRAG) has issued its final endorsement advice letter relating to the use in the European Union (EU) of 'Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)' (''the Amendments'').

EFRAG endorsement status report 12 October 2020

12 Oct, 2020

The endorsement status report has been updated to reflect that the European Union has formally adopted 'Covid-19-Related Rent Concessions (Amendment to IFRS 16)' published by the IASB in May 2020.

European Union formally adopts IFRS 16 amendments regarding COVID-19-related rent concessions

12 Oct, 2020

The European Union has published a Commission Regulation endorsing 'Covid-19-Related Rent Concessions (Amendment to IFRS 16)'.

FRC calls for improvements in the reporting of revenue and leases

25 Sep, 2020

The Financial Reporting Council (FRC) has published the results of two thematic reviews covering the current reporting on IFRS 15 ‘Revenue from Contracts with Customers’ and IFRS 16 ‘Leases’ following the first year of its application. The reviews identify a number of areas where companies need to improve their reporting.

FRC calls for comments on its draft UK Endorsement Criteria Assessment on the IBOR Phase 2 Amendments

09 Sep, 2020

The Financial Reporting Council (FRC) has published a draft UK Endorsement Criteria Assessment on the International Accounting Standards Board's (IASB’s) amendment ‘Interest Rate Benchmark Reform—Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)’ (the Amendments).

Need to know — IASB issues 'Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)'

09 Sep, 2020

This 'Need to know' addresses the amendments to IFRS 9 'Financial Instruments', IAS 39 'Financial Instruments: Recognition and Measurement', IFRS 7 'Financial Instruments: Disclosures', IFRS 4 'Insurance Contracts' and IFRS 16 'Leases' that have been published by the International Accounting Standards Board (Board). The amendments are titled 'Interest Rate Benchmark Reform—Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)'.

EFRAG endorsement status report 28 August 2020

28 Aug, 2020

The endorsement status report has been updated to reflect that the IASB issued 'Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)' on 27 August 2020 and that EFRAG published a draft endorsement advice letter on the amendments on 28 August 2020.

IASB finalises phase 2 of its IBOR reform project

27 Aug, 2020

The International Accounting Standards Board (IASB) has published 'Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)' with amendments that address issues that might affect financial reporting after the reform of an interest rate benchmark, including its replacement with alternative benchmark rates. The amendments are effective for annual periods beginning on or after 1 January 2021, with earlier application permitted.

FRC issues statement on application of Accounting for Lease Modifications (Amendment to IFRS 16 - Covid-19-Related Rent Concessions)

24 Aug, 2020

The Financial Reporting Council (FRC) has confirmed it will not pursue regulatory action in the Accounting for Lease Modifications (Amendment to IFRS 16 – Covid-19-Related Rent Concessions) before adoption by the EU.

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IFRS 16 resources