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Deloitte comment letter on tentative agenda decision on IFRS 16 — Sale and leaseback with variable payments

Published on: 13 May 2020

We have commented on the IFRS In­ter­pre­ta­tions Committee's pub­li­ca­tion in the March 2020 IFRIC Update of the tentative decision not to take onto the Committee's agenda the request for clar­i­fi­ca­tion on how to measure a right-of-use asset (RoU asset) arising from a sale and leaseback and thus how to determine the amount of any gain or loss on the transaction.

We agree with the IFRS In­ter­pre­ta­tions Committee’s conclusions regarding the measurement of the RoU asset and the resulting gain or loss for the reasons stated in the tentative agenda decision and how to measure a right-of-use asset (RoU asset) arising from a sale and leaseback and thus how to determine the amount of any gain or loss on the transaction. In addition, we suggest the Board consider (1) addressing what appears to be a conflict between IFRS 16 paragraphs BC262 and BC266 and (2) the scope of this project on subsequent measurement of the liability to encompass, for example, the impact of contract modifications.

Download the full comment letter below.

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