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IFRS 16 resources

The Financial Reporting Council (FRC) has called for improvements in the reporting under IFRS 16 Leases following the first year of its application and has set out its expectations in a recently-issued thematic review, its Annual Review of Corporate Reporting and its year-end letter to Audit Committee Chairs and Finance Directors.

The FRC continues to identify boilerplate rather than entity-specific accounting policies.  It expects companies to:

  • tailor the descriptions of their leasing accounting policies to match their particular circumstances and to cover all material areas;
  • provide detailed information about the significant judgements affecting their accounting for leases; and
  • include sufficient detail to enable a good understanding of the financial reporting effects of their leasing arrangements on their financial position, financial performance and cash flows.

In addition to considering the broader areas for improvement in its thematic review, the FRC also encourages companies to consider whether enhancements are required to IFRS 16 disclosures as a result of COVID-19. These may include amending accounting policies in relation to any lease modifications, in the light of the IASB’s amendments to IFRS 16, as well as clearly communicating any significant changes in judgements companies may make, e.g. relating to lease term, as a consequence of COVID-19. Companies may also need to enhance or introduce estimation uncertainty disclosures in relation to impairment testing of right of use assets.

The FRC will continue to review compliance with IFRS 16 through its routine work.

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

Additionally this page includes groupings for:

IFRS 16 resources

Deloitte IFRS Masterclass 2020

07 Dec 2020

On 8-10 December 2020, Deloitte Middle East offers the IFRS Masterclass 2020 as an online event. There is no charge for attending, however, prior registration is required.

Need to know — IASB proposes to amend IFRS 16 Leases to clarify the measurement of lease liabilities in sale and leaseback transactions

07 Dec 2020

This Need to know addresses the proposed amendment to IFRS 16 Leases set out in Exposure Draft ED/2020/4 'Lease Liability in a Sale and Leaseback — Proposed amendment to IFRS 16' published by the International Accounting Standards Board in November 2020.

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.

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.

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