This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Point of view — Aviation implications of the new leasing standard

Published on: 14 Jan 2016

IFRS 16 Leases has been published and is effective for periods beginning on or after 1 January 2019 (subject to EU endorsement).  This publication highlights issues from the new leasing standard that will be of interest to those in the aviation sector.

  • For lessees with operating leases an 'aircraft' (right-of-use) asset will come on balance sheet together with a lease liability.
  • Significant KPIs including ROCE will be affected - for some it will increase, for others decrease.
  • For foreign currency leases there will be increased profit and loss volatility as the lease liability is retranslated.
  • For a 'wet' lease only payments for the aircraft need to be recognised, the service element may be separated with the accounting unchanged.
  • The changes for an entity and the comparison with peers will need to be explained to stakeholders.


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.