Deloitte comment letter on tentative agenda decision on IFRS 16 — Lessee’s incremental borrowing rate
We have commented on the IFRS Interpretations Committee's publication in the June 2019 IFRIC Update of the tentative decision not to take onto the Committee's agenda the request for clarification on the determination of a lessee’s incremental borrowing rate.
We do not agree with the Committee’s conclusion that a lessee is not required to determine an incremental borrowing rate that reflects the interest rate in a loan with a similar payment profile to the lease payments. We do not believe that it is appropriate to infer that the reference to “a similar term” should be read as simply meaning over the “lease term” as defined in Appendix A.
Download the full comment letter below.